Part B: Question 1: Maggie?s Pizza Place is a price taker in a perfectly competitive market. The table shows Maggie?s hourly costs.
|
Output (pizzas per hour) |
Total cost (dollars per hour) |
|
0 |
10 |
|
1 |
21 |
|
2+ |
30 |
|
3 |
41 |
|
4?????????? |
54 |
|
5?????????? |
69 |
If pizzas sell for $14, what is Maggie?s profit-maximizing output per hour? How much economic profit does Maggie make?
– What is Maggie?s shut-down point?
– ?Derive Maggie?s supply curve.
– Over what price range will Maggie leave the pizza market?
– Over what price range will other firms with costs identical to Maggie?s enter the market?
– What is the price of pizza in the long-run?