Suppose the Busy Bee Cafe is the monopoly producer of hamburgers in Hugo, Oklaho

Question

Suppose the Busy Bee Cafe is the monopoly producer of hamburgers in Hugo, Oklahoma. The above figure represents the demand, marginal revenue, and marginal cost curves for this establishment. In order to maximize profit, the Busy Bee produces hamburgers per hour and sets a price of per hamburger. 20; $3.00 B) 50; $5.00 Q 20; $1.00 D) 30; $2.00 E) 30; $4.00 all resources are fixed, all resources are variable, output cannot be varied, some resources are fixed. Both answers B and C are correct. As a consumer moves away from the origin onto higher indifference curves, what happens? The consumer reaches more affordable combinations of goods. The consumer reaches more preferred combinations of goods. Nothing The consumer reaches less preferred combinations of goods. None of the above because it is impossible to move from one indifference curve to another.

Explanation / Answer

24. a

25. b all resources are variable.

Long run costs are accumulated when firms change production levels over time in response to expected economic profits or losses. In the long run there are no fixed factors of production

26. b. the consumer reaches more preferred combinations of goods.

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