=+14.3 Everyday and Business Application: Fast Food Restaurants and Grease (cont’d): In exercise 12.8, you investigated the impact of hybrid vehicles that can run partially on grease from hamburger production on the number of hamburgers produced by a fast food restaurant. You did so, however, in the absence of considering the equilibrium impact on prices and assumed instead that prices for hamburgers are unaffected by the change in demand for grease.

A. Suppose again that you use a decreasing returns to scale production process for producing hamburgers using only labor and that you produce 1 ounce of grease for every hamburger. In addition, suppose that you are part of a competitive industry and that each firm also incurs a recurring fixed cost F every week.