Business, 13.03.2020 22:08 tadvet1633

Consider a city that has a number of hot dog stands operating throughout the downtown area. Suppose that each vendor has a marginal cost of $1.50 per hot dog sold and no fixed cost. Suppose the maximum number of hot dogs that any one vendor can sell is 100 per day.

(a) If the price of a hot dog is $2, how many hot dogs does each vendor want to sell?

(b) If the industry is perfectly competitive, will the price remain at $2 for a hot dog in the long run? If not, what will the price be?

(c) At the price in part (b), if each vendor sells exactly 100 hot dogs a day and the demand for hot dogs from vendors in the city is Q = 4400 – 1200P, how many vendors are there?

(d) Suppose the city decides to regulate hot dog vendors by issuing permits. If the city issues only 20 permits and if each vendor continues to sell 100 hot dogs a day, what price will a hot dog sell for?

(e) Suppose the city decides to sell the permits. What is the highest price that a vendor would pay for a permit?

Answers: 2

Show answers

Another question on Business

Business, 22.06.2019 10:10

At the end of year 2, retained earnings for the baker company was $3,550. revenue earned by the company in year 2 was $3,800, expenses paid during the period were $2,000, and dividends paid during the period were $1,400. based on this information alone, retained earnings at the beginning of year 2 was:

Answers: 1

Answer

Business, 22.06.2019 13:40

Randall's, inc. has 20,000 shares of stock outstanding with a par value of $1.00 per share. the market value is $12 per share. the balance sheet shows $42,000 in the capital in excess of par account, $20,000 in the common stock account, and $50,500 in the retained earnings account. the firm just announced a 5 percent (small) stock dividend. what will the balance in the retained earnings account be after the dividend?

Answers: 1

Answer

Business, 22.06.2019 20:50

Happy foods and general grains both produce similar puffed rice breakfast cereals. for both companies, thecost of producing a box of cereal is 45 cents, and it is not possible for either company to lower their productioncosts any further. how can one company achieve a competitive advantage over the other?

Answers: 1

Answer

Business, 23.06.2019 02:10

Which of the following best describes what production accomplishes? a. efficient use of natural resources. b. a reduction in the size of the labor force. c. an increase in supply that lowers prices. d. value added to resources that already exist.

Answers: 1

Answer

You know the right answer?

Consider a city that has a number of hot dog stands operating throughout the downtown area. Suppose...

Questions