NU: Homework assignment #3 for Micro 203: (90 points)

1. Suppose you make good X for sale, which requires a building and a machine that makes them. You rent a building for $30,000 per month and rent a machine for $20,000 a month. Those are your fixed costs. The variable cost per month is given in the table below:

Quantity of labor Quantity of driving MPL (hours per VMPL (per driving (driving instructors) lessons (hours) driving instructor) instructor) 0 N/A N/A 1 IN: 15 3 4 26 5 3O Price of Domestic orange supply $0.70 Domestic market price World price + Tariff 0.50 World price 0.30 Domestic demand 0 4 6 8 12 16 Quantity of oranges (thousands)