Lucy's Lasagna is a price taker. It has the following hourly costs: (below) a. If a lasagna

Question:

Lucy's Lasagna is a price taker. It has the following hourly costs: (below)

a. If a lasagna sells for $7.50/plate, what is Lucy's profit-maximizing output per hour? How much economic profit does she make?

b. What is Lucy's shutdown point?

c. Derive Pat's supply curve.

d. Over what price range will Lucy leave the lasagna industry?

e. Over what price range will other firms with costs identical to Lucy's enter the industry?

f. What is the price of a plate of lasagna in the long-run?

Output,q TR TFC TVC TC PROFIT 0 0.0 5 15 20 MC MR ATC AVC -5.0 -12.5 15 7.5 $ 15.00 $ 20.00 6 7.5 $ 10.50 $ 13.00 9 7.5

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a Profits are maximized at q 0 Lucy should shut down in the short ...View the full answer

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Microeconomics

ISBN: 978-0073375854

2nd edition

Authors: Douglas Bernheim, Michael Whinston

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Question Posted: Nov 24, 2017 10:34 AM

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Lucy's Lasagna is a price taker. It has the following hourly costs: (below) a. If a lasagna

Question:

Output,q TR TFC TVC TC PROFIT 0 0.0 5 15 20 MC MR ATC AVC -5.0 -12.5 15 7.5 $ 15.00 $ 20.00 6 7.5 $ 10.50 $ 13.00 9 7.5 $ 10.00 $ 11.67 11 7.5 $ 10.25 $ 11.50 13 7.5 $ 1080 $ 11.80 1 7.5 2 15.0 3 22.5 4 30.0 5 37.5 5 21 26 -11.0 -12.5 -16.0 -21.5 5 30 35 41 46 5 54 59

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a Profits are maximized at q 0 Lucy should shut down in the short ...View the full answer

Microeconomics

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