Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes...
Question:
Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the table below.
| Number of Mugs Per Day | Total Cost Per Day |
| 0 | $10 |
| 1 | $14 |
| 2 | $19 |
| 3 | $25 |
| 4 | $32 |
| 5 | $40 |
| 6 | $49 |
If the market for mugs is perfectly competitive, and mugs sell for $7.50 each, then Chris should make _____ mugs per day. (0, 4, 5, or 6)
Marginal Cost:
Marginal cost is the increase in total cost of production when an additional output is produced. To maximize profit, a firm will produce until marginal revenue is equal to marginal cost.
Answer and Explanation: 1
Become a Study.com member to unlock this answer! Create your account
View this answerIn a competitive market, profit-maximizing output is where marginal cost is equal to price. We first compute the marginal cost, which is the addition...
See full answer below.
Ask a question
Our experts can answer your tough homework and study questions.
Ask a question Ask a questionSearch Answers
Learn more about this topic:
Get access to this video and our entire Q&A library
Profit Maximization: Definition, Equation & Theory
from
Chapter 24 / Lesson 6
40K
Learn the profit maximization definition, its importance, and explore the profit maximization theory. See how to calculate profit maximization with examples.
Related to this Question
- Sarah and Charles are both potters and each can switch between the production of vases and mugs at a constant rate. The table shows the total number of vases or decorative mugs that each person can pr
- John is thinking about setting up a doughnut van. The van itself costs $200. The ingredients for each doughnut cost $0.50. a. In one diagram, illustrate total cost, total fixed cost, and total variable cost. b. In another diagram, directly below the previ
- Suppose Carlos has a weekly budget of $32 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. If Carlos spends his entire $32 on coffee, he can buy _____ cups of coffee. If he spends his entire $32 on cereal,
- Suppose for Donnie, cookies and milk are perfect complements. For every cookie he eats, he wants one glass of milk. Suppose his allotted income for cookies and milk is $12 per week, the price of cooki
- Cool - T produces both cool and very cool t-shirts in a ratio of 2:3. Its costs are C(q_i, q_2) = 3200 + 0.1q_1 + 2q_1^2 + 0.2 q_2, where q_1 is the number of cool t-shirts and q_2 is the number of ve
- Assume the price of baseballs is $5 and baseball gloves is $20. Assume you have $100 total to spend on these items. Construct a table which lists the various combinations in which you can make the pur
- Consider a town in which only two residents, Eric and Ginny, own wells that produce water safe for drinking. Eric and Ginny 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'
- The table below shows the possible productions of Rachel and Fred for pens and pencils. What is Fred s opportunity cost of making 1 pen?
- The table below shows the costs incurred at Perry's potato farm. Complete the table. and show step by step how you came up with the figures.
- Suppose that Paulie and Vinny each can produce either ice cream or t-shirts. The table below shows the quantity of each good that Paulie and Vinny each can produce in one hour, respectively, if they d
- Consider a town in which only two residents, Brian and Crystal, own wells that produce water safe for drinking. Brian and Crystal can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows the
- Harry purchases butterbeer (B) and chocolate frogs (C) and has the following utility function: U(B,C) = min(4B,C). He has $360 to spend on butterbeer and chocolate frogs. Suppose that the price of but
- If it costs $45 to buy a designer shirt, how much more will it cost to buy such ten shirts?
- Suppose each of the seven dwarfs buys four mugs of ginger ale per week from Snow White's cafe when the price per mug is $2. If the seven dwarfs are the entire market demand for Snow White's ginger ale, which of the following is the correct value for marke
- Suppose Rob, an avid golfer, spent a total of $1,800 on green fees for the 60 rounds of golf he played in 2014 and a total of $2,000 on green fees for the 50 rounds of golf he played (on the same cour
- The price of a cup of coffee is $2.00. The price of a cup of tea is $1.20. The relative price of a cup of tea with respect to a cup of coffee is A) 0.6 cups of coffee. B) 1.25 cups of coffee. C) 1.0 cup of coffee. D) 0.75 cups of coffee. E) 1.67 cups
- Suppose each of the seven dwarfs buys four mugs of ginger ale per week from Snow White's cafe, when the price per mug is $2. If the seven dwarfs are the entire market demand for Snow White's ginger ale, which of the following is the correct value for mark
- The table below shows the possible productions of Rachel and Fred for pens and pencils. What is Rachel s opportunity cost of making 1 pen?
- Bob places a $10 value on a glass of red wine, and Keith places an $8 value on it. If there is no tax on glasses of red wine, the price of a glass of red wine reflects the cost of making it. The equil
- You go to your campus bookstore and see a coffee mug emblazoned with your university's shield. It costs $5 and you value it at $8, so you buy it. On the way to your car, you drop it and it breaks into pieces. Should you buy another one or should you go h
- Suppose Gilberto has a weekly budget of $32 to spend on coffee and cereal. Coffee is priced at $4 per cup, and cereal is priced at $2 per box. \\(a.) If Gilberto spends his entire $32 on coffee, he ca
- Suppose a survey gives the average amount that Raleigh households spent on drinks in 2004, the unit prices of the drinks in 2004 and in 2016. Quantity Price^{2004} Price^{2016} Beer 700 bottles $1.50 $3.00 Wine 200 bottles $9.00 $10.50 Fruit juice 100 bo
- Ben enjoys coffee and tea according to the function U=c+t. The price of coffee is $2 and price of tea is $1. 1. If Ben's income is $4, how much coffee and tea will he buy? Draw a graph of Ben's indif
- Kate and Becca sell lemonade on the corner for $0.50 per cup. It costs them $0.10 to make each cup. On a certain day, their producer surplus is $20. How many cups did Kate and Becca sell?
- Consider a town in which only two residents, Alex and Becky, own wells that produce water safe for drinking. Alex and Becky can pump and sell as much water as they want at no cost. For them, total rev
- Suppose that the quantity demanded of visits to a doctor per year is given by X = 12 - 0.05P, where X is the number of visits and P is the price the patient pays for a visit. a. How many visits would the patient make if he or she had to pay the full price
- Jacob buys only milk and cookies. a. In year 1, Jacob earns $100, milk costs $2 per quart, and cookies cost S4 per dozen. Draw Jacob's budget constraint. b. Now suppose that all prices increase by 10 percent in year 2 and that Jacob's salary increases b
- Suppose the price of bagels in Allentown is currently $1.05 per bagel. There are 10 low-cost bakeries and 10 high-cost bakeries that can produce bagels, each of which has the supply function low-cost bakery: Qs(low-cost) = 200P - 125 high-cost bakery: Q
- Suppose that the company "Ann's lemonade stand" uses labor as its only input. The following table shows how many glasses of lemonade Ann's lemonade stand can produce using different amounts of labor. |Labor (hour) |Glasses of Lemonade | 0| 0 |1 |50 | 2
- For a college student who wishes to calculate the true costs of going to college, the costs of room and board a. should be counted in full, regardless of the costs of eating and sleeping elsewhere. b. should be counted only to the extent that they are mor
- Chris has $100 to spend this month on movies and/or books. A movie costs $10 and a book costs $20. a) Draw Chris's budget constraint (or budget line), with the number of movies purchased on the vertic
- Suppose that you are given a $100 budget at work that can be spent only on two items: staplers and pens. If staplers cost $10 each and pens cost $2.50 each, then the opportunity cost of purchasing one stapler is: a. 10 pens. b. 5 pens. c. zero pens. d. 4
- 1. Sam spends $6/week on orange juice and apple juice. Orange juice costs $2/cup while apple juice costs $1/cup. Sam views 1 cup of orange juice as a perfect substitute for 3 cups of apple juice. Find
- Suppose there are M farmers, each of whom has the right to graze cows on the village common. The amount of milk a cow produces depends on the total number of cows, N, grazing on the green. The revenue
- John is thinking about setting up a doughnut van. The van itself costs $200. The ingredients for each doughnut cost $0.50. a. What is the fixed cost of doing business in the short-run? b. What is the variable cost per doughnut in the short-run? c. Constru
- Harry purchases butterbeer (B) and chocolate frogs (C) and has the following utility function: U(B,C)=min(4B,C). He has $360 to spend on butterbeer and chocolate frogs. Suppose that the price of butt
- Angela always takes one cup of cookies with one cup of coffee. Cookies cost $2 per cup, and coffee costs $1 per cup. Angela has $12 to spend on cookies and coffee. Consider a price drop in cookies to $1 per cup. A) Illustrate Angela's optimal consumption
- Angela always takes one cup of cookies with one cup of coffee. Cookies cost $2 per cup and coffee costs $1 per cup. Angela has $12 to spend on cookies and coffee. Consider a price drop in cookies to $1 per cup. A. Illustrate Angela's optimal consumption b
- When calculating the cost of college, which of the following should you probably not include? a) The cost of tuition, b) The cost of books required for college classes, c) The income you would have earned had you not gone to college, d) The cost of rent f
- Consider a town in which only two residents, Felix and Janet, own wells that produce water safe for drinking. Felix and Janet can pump and sell as much water as they want at no cost. For them, total r
- Assume Mary consumes only tea and pastries. A cup of tea costs 5 euros and a pastry costs 8 euros. Her weekly income is 450 euros. Mary always drinks 2 cups of tea for every pastry she consumes. What is Mary's optimal weekly consumption bundle? a) 25 cups
- Suppose that you are given a $100 budget at work that can be spent only on two items: staplers and pens. If staplers cost $10 each and pens cost $2.50 each, then the opportunity cost of purchasing one stapler is: a. 10 pens b. 5 pens c. zero pens d. 4 pen
- Assume that apples cost $0.50 in 2010 and $1 in 2016, whereas oranges cost $1 in 2010 and $1.50 in 2016. If 4 apples were produced in 2010 and 6 in 2016, whereas 3 oranges were produced in 2010 and 6
- What is the average per-episode cost for a Netflix show, and is there any way to calculate how much money Netflix generates per episode?
- Suppose that the MRS is 4 cups of coffee per pizza and that the prices of coffee and pizza are $2.50 and $10 respectively. In this situation _____.
- Suppose a local golf club uses a cost-plus approach to charge members to play golf. In particular, the club estimates that it will cost $298,000 to provide 12,000 rounds of golf. If the club marks up
- Pat's Catering finds that when it caters 20 meals a week, its total cost is $6,000. If Pat has a total variable cost of $5,000, what is Pat's total fixed cost? A. $6,000 B. $50 C. $250 D. $1,000
- Connie always takes one cup of cookies with one cup of coffee. Cookies cost $2 per cup, and coffee costs $1 per cup. Connie has $12 to spend on cookies and coffee. Consider a price drop in cookies to $1 per cup. (a) Illustrate Connie's optimal consumption
- George T-Shirt shop produces 3,000 custom printed T-shirts per month. George fixed costs are $9,000 per month. The marginal cost per T-Shirt is a constant at $10. George's break-even price is $[{Blank}] per shirt. Suppose George sells 50% more T-shirts pe
- The table below shows the daily production of dresses and jackets by Mary and Mark. (a.) How many jackets must Mary forgo for every dress she makes? (b.) What is the opportunity cost for Mark of J
- Given the table below. If farmer Jim desired to produce wheat at the lowest average total cost for each bushel, how many workers should he hire?
- Abby consumes only apples. In year 1, red apples cost $2 each, green apples cost $1 each, and Abby buys 15 green apples. In year 2, red apples cost $1, green apples cost $2 and Abby buys 10 red apples. a. Compute a consumer price index for apples for each
- Suppose your tuition is $20,000 this semester and your books cost $1,000. You can only work 20 rather than 40 hours per week during the 15 weeks you are taking classes, and you make $10 per hour. Your room and board cost $5,000 this semester. What is your
- Suppose that Portugal and Germany both produce beer and stained glass. Portugal's opportunity cost of producing a pane of stained glass is 4 barrels of beer while Germany's opportunity cost of produci
- When calculating the cost of college, which of the following should you probably include? a) The cost of your meal plan for the cafeteria, b) The cost of books required for college classes, c) The income you earn at your part-time job, d) The cost of livi
- Kristi and Rebecca sell lemonade on the corner. It costs them 7 cents to make each cup. On a certain day, they sell 40 cups, and their producer surplus for that day amounts to $15.20. Kristi and Rebecca sold each cup for: a. 31 cents. b. 38 cents. c. 45 c
- Betty sets up a lemonade stand and charges $1 per glass. it cost her $50 to set up the stand. Describe the function that gives the profit, p, she makes by selling g glasses of lemonade.
- In one economic experiment, participants were willing to pay an average of $6 for a coffee mug. After possessing the mug for one hour, the same participants valued the mug at an average of $9. Possess
- Lakshani has $5 to spend on pens and pencils. Each pen costs $0.50 and each pencil costs $0.10. She is thinking about buying 6 pens and 20 pencils. The last pen would add five times as much to her total utility as the last pencil.
- John sold three shirts at $15 each, what was the total amount that John made?
- Kyle only likes milk with chocolate. He likes 1 glass of milk M with 1 spoon of chocolate C. What is Kyle's income effect for milk? P M denotes the price of milk, P c denotes the price of chocolate,
- Suppose your college charges you separately for tuition, and for room and board. What is a cost of attending college, that is not an opportunity cost? What is an explicit opportunity cost of attending
- Suppose there are I farmers, each of whom has the right to graze cows on the village common. The amount of milk a cow produces depends on the total number of cows, N, grazing on the green. The revenue
- Briefly explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlor. a. The payment he makes to buy tattoo ink. b. The wages he pays his employees. c. The $500-per-month payment he makes to advertise his s
- Nine books are to be bought by a student. Art books cost $6.00 each and biology books cost $6.50 each . If the total amount spent was $56.00, how many of each book was bought?
- Ernie owns a water pump. Because pumping large amounts of water is harder than pumping small amounts, the cost of producing a bottle of water rises as he pumps more. Here is the cost he incurs to produce each bottle of water: Cost of first bottle $1 Cos
- Brenda's Nice Nails is a manicuring business in a perfectly competitive market in lthaca. The market price of a manicure is $25 00. The table shows Brenda's total costs. How many manicures does Brenda
- Jane spends $210 per month on wine and beer. Her utility is given by TU=100WB, where W represents the number of bottles of wine that she buys and B represents the number of cases of beer that she buys. If wine costs $10 per bottle and beer costs $15 per c
- Simple Math; "A bat and ball cost one dollar and ten cents. The bat costs one dollar more than the ball. How much does the ball cost?"
- Suppose that with a budget of $210, Deborah spends $126 on sushi and $84 on bagels when sushi costs $2 per piece and bagels cost $2 per bagel. But then, after the price of bagels falls to $1 per bagel
- Uncle Jeremy's Farm has costs and revenue as seen in the graph below. Uncle Jeremy knows how well you've been doing in your economics course and has asked for your help in determining how to make as m
- The table below shows some of the costs incurred at Betty's Brickworks Complete the boxes in the table. Answer to the same number of decimal places as other numbers in the same column.
- Tea farmers collect the leaves and arrange them in different boxes based on tea quality. They are paid by the number of trees from where the leaves were plucked. Their total payment is the amount of money for plucking leaves multiplied by the number of tr
- suppose Albert has a weekly budget of $96 to spend on cereal and juice. Juices priced at $4 per gallon, and cereal is priced at $6 per box. If Albert spends his entire $96 on juice, he can buy ......
- Suppose a person has $8.00 to spend only on apples and bananas. Apples cost $0.40 each, and bananas cost $0.10 each. A) If this person buys only apples, how many can be purchased? B) If this person bu
- Suppose Yakov has a weekly budget of $48 to spend on coffee and yogurt. Coffee is priced at $4 per cup, and yogurt is priced at $6 per container. If Yakov spends his entire $48 on coffee, he can buy _____ cups of coffee. If he spends his entire $48 on yog
- The table below describes the hourly cost Sam faces as he washes more cars. Complete the missing values in the table. ||Cars washed per hour||Total cost ($)||Marginal cost ($) |1|$2|$2 |2| |4 |3|12| |
- Consider a town in which only two residents, Sean and Yvette, own wells that produce water safe for drinking. Sean and Yvette can pump and sell as much water as they want at no cost. For them, total r
- Consider a town in which only two residents, Dmitri and Frances, own wells that produce water safe for drinking. Dmitri and Frances can pump and sell as much water as they want at no cost. For them, total revenue equals profit. The following table shows t
- A cup of coffee costs $1.79 in New York and 2.54 euros in Paris. If the exchange rate is $0.93 per euro, what price difference exists in terms of the European currency? Show work. a. The cup of coffee
- Consider a town in which only two residents, Kevin and Maria, own wells that produce water safe for drinking. Kevin and Maria can pump and sell as much water as they want at no cost. For them, total r
- Matt derives all of his utility from consuming milk shakes. He devotes his entire $20 allowance to milk shakes each week. Suppose the price of milk shakes rise from $2 to $4. Compute Matt's Equivalent
- When Erin has $25 to spend, she sees 2 movies at $10 a movie ticket and buys 1 six-pack of soda. a) Calculate the price of soda. b) If her budget for soda and movies increases to $50, what is the ch
- Suppose that you initially have $100 to spend on books or movie tickets. The books start off costing $25 each and the movie tickets start off costing $10 each. For each of the following situations, would the attainable set of combinations that you can aff
- Suppose a person has $ 8.00 to spend only on apples and bananas. Apples cost $ 0.40 each, and bananas cost $ 0.10 each. a) If this person buys only apples, how many can be bought? b) If this person bu
- Mike and Sandy are two woodworkers who both make tables and chairs. In 1 month, Mike can make 4 tables or 20 chairs, and Sandy can make 6 tables or 18 chairs. What is the opportunity cost of 1 chair? a. 1/5 table for Mike and 1/3 table for Sandy b. 5 tabl
- Suppose the nation of Arcadia produces only two goods, teapots and surfboards. If Arcadia produces teapots, it can make 40 per day. If Arcadia produces only surfboards, it can make 60 per day. What is
- Adams produces graffiti with the following technology: F(K, L) = K^(1/3) L^(1/3) , where L is the number of hours per day he devotes to making graffiti and K is the amount of chalk. Each unit of labour cost $1 and each unit of chalk cost $4. In the short
- A shirt goes for $10. If Mary bought 90 shirts, how much would she have spent on the shirts?
- Suppose the price of coffee is $3 each, the price of bagels is $2 each, and a person's budget is $40. The relative price of coffee is A. 1.5 bagels. B. 2/3 of a bagel. C. 13.33 bagels. D. 20 bagels.
- Keegan has $30 to spend on Pita Wraps and Bubble Tea. The price of a Pita Wrap is $6 and the price of a glass of Bubble Tea is $3. a. Complete the table by filling in the blank spaces. b. Suppose Keeg
- The table above shows the output per month of two people; Fred and Barney. They can either devote their time to making pogo sticks or making unicycles. What is Barney's opportunity cost of making a un
- Jordan and Jesse can produce either waffles or pancakes. Jordan can produce a waffle with an opportunity cost of 1.5 pancakes. Jesse can produce a waffle with an opportunity cost of 2 pancakes. Who should specialize in waffles?
- Jim buys only milk and cookies. In year 1, Jim earns $100, milk costs $2 per quart, and cookies cost $4 per dozen. Draw Jim's budget constraint.
- Suppose that an individual has a constant MRS of shoes for sneakers of 3/4. If sneakers cost twice as much as shoes, he or she will: (a) buy only sneakers. (b) buy only shoes. (c) spend his or her income equally on sneakers and shoes. (d) wear sneakers on
- Consider Lisa's total willingness to pay (WTP) for ice cream in the table. If the price of ice cream is $1.50 and Lisa aims to maximize her well-being, how many ice creams will she consume and what is
Explore our homework questions and answers library
Browse
by subject