At McDonald\'s, no reservations are accepted; at The St. Louis Art Museum Restau

Question

At McDonald's, no reservations are accepted; at The St. Louis Art Museum Restaurant, reservations are accepted; at Le Bemardin in New York, reservations are essential Le Bernardin in New York allocates scarce table resouroes by and the St. Louis Art Museum Restaurant allocates scarce table resources by O A market price; market price and force OB. majority rule: majority rule O C. personal characteristics personal characteristics and first-come, first-served D. frst-come,first-served, first-come, first-served O E. a command system; a combination of a command system and first-come, irst-served McDonald's allocates scarce table resources by O A a combination of a command system and first-come, first-served ??.force OC., first-come, first served O D. personal characteristics and first-come, first-served OE sharing equally

Explanation / Answer

Answer 1) All the restaurants use a first-come, first-served basis. However each restaurant is using a different version of the first-come, first-served allocation system.

McDonalds allocates scarce table resources by personal characteristics because Personal characterstics means consumers with the "right" characteristics get the resource. Hence, Option "D" is the right answer for the 1st as well as the 2nd question.

Answer 2)

Hence, there is economic loss of $40,192

Calculation of Explicit Cost Particular Amount Greeting Card Cost $ 10,000.00 Rent $ 10,000.00 Utilities & office Expense $    2,200.00 Total Explicit Cost $ 22,200.00 Calculation of Implicit Cost Particular Amount Real Estate Earning $ 45,000.00 Greeting Card Return $ 20,000.00 Net Cash Register($2300- $1400) $        900.00 Interest on Saving A/c (4% of $ 2300) $          92.00 Total Implicit Cost $ 65,992.00 Calculation of Economic Profit Particular Amount Greeting Card Sold $ 48,000.00 Total Explicit Cost (To be deducted) $ 22,200.00 Total Implicit Cost (To be deducted) $ 65,992.00 Economic Profit -$ 40,192.00

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