Complete the previous table by determining the marginal revenue (MR) and marginal cost (MC) for a change in output from 0 to 15,15 to 30 , and 30 to 45 haircuts per day, and enter it in the appropriate column. (Hint: Remember that the definition of MR is the change in total revenue divided by the change in output.)
Suppose the hair salon is currently giving 15 haircuts per day. As an economist, what advice would you give Manuel, the owner of the shop?
"You should perform 45 haircuts per day, because at that quantity, total revenue minus total cost is positive. " "You should perform fewer haircuts per day, because the marginal revenue from performing an additional haircut is smaller than the marginal cost."
"You should perform the number of haircuts that yields the highest total revenue."
"You should perform more haircuts per day, because the marginal revenue from performing an additional haircut is larger than the marginal cost."
Homework Answers
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As an economist, what advice would you give Manuel, the owner of the shop?
1. Profit maximization Suppose Hannah gives haircuts on Saturdays to make extra money. She is the...
1. Profit maximization Suppose Hannah gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Hannah in giving haircuts is her time. As she gives more haircuts, Hannah must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If...
Suppose Kate gives haircuts on Saturdays to make extra money. She is the only person in...
Suppose Kate gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Kate is her time. As she gives more haircuts, Kate must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she gives two haircuts, she gives...
Suppose Latasha gives haircuts on Saturdays to make extra money. She is the only person in...
Suppose Latasha gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Latasha is her time. As she gives more haircuts, Latasha must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she gives two haircuts, she gives...
Fill in the missing cells of the table and then use them to answer the questions that follow.
1. Profit maximizationSuppose Frances gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays. and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Frances in giving haircuts is her time. As she gives more haircuts, Frances must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she...
Suppose Manuel runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear.
3. Profit maximization using total cost and total revenue curves Suppose Manuel runs a small business that manufactures teddy bears. Assume that the market for teddy bears is a competitive market, and the market price is $20 per teddy bear. The following graph shows Manuel's total cost curve. Use the blue points (circle symbol) to plot total revenue and the green points (triangle symbol) to plot profit for teddy bears quantities zero through seven (inclusive) that Manuel produces.TOTAL COSTQUANTITY2003514024535547059561257 Calculate Manuel's marginal revenue and...
Manuel (should or should not ) increase production from 8 to 9 fire engines, because revenue...
Manuel (should or should not ) increase production from 8 to 9
fire engines, because revenue gained is (less than or greater
than) revenue lost in this scenario.
Please let me know if my graph is correct otherwise draw it out
for me and please check over if I answered all parts correctly
thank you!
Manuel's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Manuel produced eight fire engines, but he has decided...
7. Suppose that you have been hired as an economist by OPEC and given the following...
7. Suppose that you have been hired as an economist by OPEC and given the following schedule showing the world demand for oil:Your advice is needed on the following Price(S/barrel) Quantity demanded(millions of barrels/day) 10 20 30 40 50 60 50 40 30 20 questions: a) If the price rises from $20 to $30 a barrel, will the total revenue from oil sales increase or decrease? b) What will happen to total revenue if the supply of oil is decreased...
2. Breakdown of a cartel agreement Consider a town in which only two residents, Manuel and...
2. Breakdown of a cartel agreement Consider a town in which only two residents, Manuel and Poornima, own wells that produce water safe for drinking. Manuel and Poornima can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Total Revenue Price Quantity Demanded (Dollars per gallon) (Gallons of water) (Dollars) 3.60 0 3.30 35 $115.50 3.00 70 $210.00 105 $283.50 2.70...
NAME Discussion Section Number TA Name la. In 1698 Peter I of Russia (Peter the Great...
NAME Discussion Section Number TA Name la. In 1698 Peter I of Russia (Peter the Great or PtG) introduced a tax on beards. On the Marshallian cross diagram in Figure 1, I have indicated the demand for beards which relates the cost of beards to the average length of beards (average beard length is the quantity on the horizontal axis) The cost of beards on the supply curve was 0 in 1698 as Russian men found it more costly to...
need help with all of them Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from...
need help with all of them
Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from selling an additional unit of output the revenue in excess of what can be earned in the next-best alternative the last dollar needed to make zero economic profit the extra revenue generated by a $1 change in price the last dollar needed to make maximum profit Question 7 (1 point) In which of the following situations should a profit-maximizing...
1. Profit maximization Suppose Hannah gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Hannah in giving haircuts is her time. As she gives more haircuts, Hannah must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If...
Suppose Kate gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Kate is her time. As she gives more haircuts, Kate must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she gives two haircuts, she gives...
Suppose Latasha gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Latasha is her time. As she gives more haircuts, Latasha must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she gives two haircuts, she gives...
1. Profit maximizationSuppose Frances gives haircuts on Saturdays to make extra money. She is the only person in town cutting hair on Saturdays. and therefore has some market power. Assume that she does not incur fixed costs, and the only significant variable cost to Frances in giving haircuts is her time. As she gives more haircuts, Frances must increasingly forgo other valuable Saturday activities. For example, if she gives one haircut, she forgoes reading the paper after breakfast. If she...
Manuel (should or should not ) increase production from 8 to 9
fire engines, because revenue gained is (less than or greater
than) revenue lost in this scenario.
Please let me know if my graph is correct otherwise draw it out
for me and please check over if I answered all parts correctly
thank you!
Manuel's Fire Engines is the sole seller of fire engines in the fictional country of Pyrotania. Initially, Manuel produced eight fire engines, but he has decided...
7. Suppose that you have been hired as an economist by OPEC and given the following schedule showing the world demand for oil:Your advice is needed on the following Price(S/barrel) Quantity demanded(millions of barrels/day) 10 20 30 40 50 60 50 40 30 20 questions: a) If the price rises from $20 to $30 a barrel, will the total revenue from oil sales increase or decrease? b) What will happen to total revenue if the supply of oil is decreased...
2. Breakdown of a cartel agreement Consider a town in which only two residents, Manuel and Poornima, own wells that produce water safe for drinking. Manuel and Poornima can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the town's demand schedule for water. Total Revenue Price Quantity Demanded (Dollars per gallon) (Gallons of water) (Dollars) 3.60 0 3.30 35 $115.50 3.00 70 $210.00 105 $283.50 2.70...
NAME Discussion Section Number TA Name la. In 1698 Peter I of Russia (Peter the Great or PtG) introduced a tax on beards. On the Marshallian cross diagram in Figure 1, I have indicated the demand for beards which relates the cost of beards to the average length of beards (average beard length is the quantity on the horizontal axis) The cost of beards on the supply curve was 0 in 1698 as Russian men found it more costly to...
need help with all of them
Question 6 (1 point) In perfect competition, marginal revenue is the change in revenue from selling an additional unit of output the revenue in excess of what can be earned in the next-best alternative the last dollar needed to make zero economic profit the extra revenue generated by a $1 change in price the last dollar needed to make maximum profit Question 7 (1 point) In which of the following situations should a profit-maximizing...
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