2. A local snow cone business sells snow cones in one size for $3 each. It has...
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2. A local snow cone business sells snow cones in one size for $3 each. It has the following cost and output structure per hour:
Output (cones per hour) Total cost (per hour)
0 $60 10 $90 20 $110 30 $120 40 $125 50 $135 60 $150 70 $175 80 $225
a. Calculate the total revenue for the business at each rate of output.
b. Calculate the total profi t for the business at each rate of output.
c. Is the business operating in the short run or the long run?
d. Calculate the profi t-maximizing rate of output using the MR = MC rule. (Hint: to do this, you should fi rst compute the marginal revenue and marginal cost from the table.)
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