Julianne runs a business and needs to decide how many hours to stay open. Table

Question

Julianne runs a business and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour Suppose that we observe Julianne slaying open 2 hour* per day. If she is following the marginal principle. what must her marginal benefit be? $8 $12 $20 $22 Julianne runs a business and needs to decide how many hours to stay open liable 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that Julianne's marginal befit of staying open per hour is S28. If she is following the marginal principle, how many hours should Juliana stay open? 1 hour 3 hours 6 hours 7 hours

Explanation / Answer

17. A)

For economic equilibrium, Marginal Benefit = Marginal Cost

Thus, for 2 hours of operation, Marginal Benefit = $8

18. D)

Again for economic quilibrium,

MC = MB

Thus, Marginal Cost = $28

Implies, Hours of Operation = 7

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