Question

Figure 16-2. The figure is drawn for a monopolistically competitive firm. MC Demand MR: 16 24 32 46 48 56 64 0 9. Refer to Figure 16-2. The finn's profit-maximizing level of output is a. 48 units b. 24 units. c. 32 units. d. 16 units Scenario 13-8 Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, 50.03 for lemons, S0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each. 10. Refer to Scenario 13-8. What are Wanda's total economic costs per glass? a. 50.08 b. 50.10 c. $0.02 d. $0.18 11. Refer to Scenario 13-8. What are Wanda's total accounting profits? a. $96 b. $150 c. $126 d. $24 12. Refer to Scenario 13-8. What are Wanda's explicit costs per glass? a. $0.02 b. $0.08 c. $0.18 d. 30.10

Answer 1

9) output = 24 units

option(B)

10) economic costs = 0.01+0.02+0.03+0.02+0.10 = 0.18

option(D)

11) Accounting profits = total revenue - explicit costs

300*0.50 - 300*0.08

= 150-24

= 126

option(C)

12) Explcit costs = 0.01+0.02+0.03+0.02 = 0.08

option(B)

13) Implicit costs = 0.10

option(A)

14) Economic profits = accounting profits - implicit costs

= 126-300*0.10

= 126-30

= 96

option(A)