Microeconomics

Guinan operates the Ten Forward Convenience Store in a small college town. Guinan sells six packs of beer for off-premises consumption. Guinan has very limited store space and has decided to limit her product line to one brand of beer, choosing to forego the snack food options that normally accompany her business. lGluinan's is the only beer retailer physically located within the town limits. She faces considerable competition, however, from sellers located outside of town. Guinan regards the market as highly competitive and considers the current $4.50 per six pack selling price to be beyond her control. Guinan's total cost function is: T0 = 2000 + 0.00202 where Q refers to six packs per week. Included in the xed cost gure is a $750 per week salary for Guinan, which she considers to be her opportunity cost. [For all answers, round to the nearest dollar value and omit spaces, commas, and dollar signs] a. Calculate the prot maximizing output for Guinan. b. What is her prot? c. Is this an economic prot or an accounting prot? d. The town council has voted to impose a tax of $.50 per six pack sold in the town, hoping to discourage beer consumption. What is Guinan's new prot? e. Should Guinan continue to operate? [Short run or long run, don't overthink it)