What price will c and n charge

Assignment Help Microeconomics

Reference no: EM13733221

1. The graph below, which shows the MC, ATC, and AVC curves for a firm in the perfectly competitive pumpkin pie market. The market price of pies is $10 per pie.

654_Firm demand and marginal revenue.png

a. Draw Nina's firm demand and marginal revenue curves based on the market price of $10.

b. When the market price is $10 per pie, how many pies will Nina produce? Show that profit maximizing quantity q* in the graph above.

c. What will be Nina's profit? Show the profit in the graph.

2. After acing their Econ 200 course, Connor and Nicholas decide to start a business (C&N Tutoring) offering economics tutoring on the Washburn Campus. First they decide that they will need to do some advertising and buy some textbooks and markers, which works out to approximately $20 per week. This $20 is a fixed cost since it doesn't change with the number of hours per week they choose to tutor. Their only variable cost is the opportunity cost of their time. Their next best alternative to tutoring is earning $9 per hour at their jobs. However, when they tutor more than 20 hours per week the opportunity cost of their time starts increasing, since its means they have less time to spend with friends, studying or sleeping. They calculate their weekly costs as the following:

263_Firm demand and marginal revenue1.png

Connor and Nicholas need to figure out what price they should charge. Their goal is to maximize their profit. In order to determine what the demand for their services would be, they conduct a number of surveys of their fellow students and estimate that C&N Tutoring will have the following demand:

a. Complete the table by calculating the revenue and marginal revenue for each price/quantity point on their demand.

b. What price will maximize C&N's profit?

3. The graph below shows the ATC, MC, demand and MR for C&N Tutoring Services.

1673_Firm demand and marginal revenue2.png

a. C&N's objective is to maximize profit. What price will C&N charge for their services in order to maximize their profits? How many hours a week will they be tutoring at that price?

b. Show the profit maximizing price (P*) and quantity (Q*) from part a. in the graph along with C&N's profit.

Reference no: EM13733221

Questions Cloud

Find general information and stay abreast of current events : Does the company's business model remain sound as more consumers go to the Internet to find general information and stay abreast of current events and news stories

Making money and donating part of it to charity : Making money and donating part of it to charity-that is, to people specialized in serving the general welfare, Attempting to do good within your business by

Discuss the growing disparity of earnings : Discuss the growing disparity of earnings in our society in regards to facing a trade-off between equity and efficiency and what does this have to do with the Ten Principles of Economics?

Mini strategic audit on e-company : Conduct a mini Strategic Audit on e-company Tigerdirect and Best Buy, Visit the each company's website at Tiger Directand Best Buy. After conducting research, identify key strategies that each company has in common.

What price will c and n charge : C&N's objective is to maximize profit. What price will C&N charge for their services in order to maximize their profits? How many hours a week will they be tutoring at that price?

Describe vertical and horizontal channel conflict : Using the Waters Bottling Company, continue to build the Marketing Plan Sections for the product you have selected/ invented/ created. Vertical & Horizontal Channel Conflict

How did the major hollywood firms respond to the challenge : How did the major Hollywood firms respond to the challenge posed by First National Exhibitors' Circuit in 1917? What kinds of benefits resulted from the industry's adoption of vertical integration?

Explain the impact of vertical integration in hollywood : Explain the impact of vertical integration in Hollywood. What were some of the pros and cons of vertical integration on the film industry?

Marketing implementation & evaluation : Marketing Implementation & Evaluation, Select two of those career choices and discuss the skills required to secure these two positions.

User Account

All Pages