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Suppose the consumer can choose either coffee shop 1 or coffee shop 2, but not both.
- Assuming that other things (such as location, quality of coffee, and so on) are the same, which coffee shop would the customer prefer? Will the difference in the average price per cup affect your choice between coffee shop 1 and 2? Explain your answer.
- How, if at all, would your answer above change if coffee shop 2 provides unlimited cups of coffee for the price of $7.00 per day? Explain your answer.
Q. Implications for the shape of cost function? A cost function is also a mathematical relationship, one which relates the expenses an organisation incurs on the quantity of ou
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Michael was discussing the importance of production analysis and cost analysis to managerial economics with a final year Open Campus student. The final year student, Catherine, sta
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