Question
I need this completed by May 1st, 10am. Exercise2 Mary Magnolia wants to open a flower shop, the Petal Pusher, in a new mall. She
I need this completed by May 1st, 10am.
Exercise2
Mary Magnolia wants to open a flower shop, the Petal Pusher, in a new mall. She has her choice of three different floor sizes, 200 square feet, 500 square feet, or 1,000 square feet. The monthly rent will be $1 a square foot. Mary estimates that if she hasFsquare feet of floor space and sellsybouquets a month, her variable costs will becv(y) =y3/4Fper month.
(1) If she has 200 square feet of floor space, write down her marginal cost function
and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost?
(2)If she has 500 square feet, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost? .
(3) If she has 1,000 square feet of floor space, write down her marginal cost function and her average cost function. At what amount of output is average cost minimized? At this level of output, how much is average cost?
(4) Show Mary's average cost curve and her marginal cost curves if she has 200 square feet. Show her average cost curve and her marginal cost curve if she has 500 square feet. Show her average cost curve and her marginal cost curve if she has 1,000 square feet. Label the average cost curves AC and the marginal cost curves MC.
(5) Show Mary's long-run average cost curve and her long-run marginal cost curve in your graph. Label them LRAC and LRMC.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started