Lydia runs a small nail salon in the town of New Hope. She is debating whether she should extend her hours of operation. Lydia figures that her sales revenue will depend on the number of hours the nail salon is open as shown in the table above. She would have to hire a worker for those hours at a wage rate of $10 per hour.
What is Lydia's marginal benefit if she decides to stay open for two hours instead of one hour?
a. $125
b. $75
c. $25
d. $50
$25
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The public debt is
A) an excess of government spending over government revenues during a given time period. B) all federal government debt irrespective of who owns it. C) a situation in which the government's spending is exactly equal to the total taxes and other revenues it collects during a given time period. D) the total value of all outstanding federal government securities.
Efficiency occurs in a market when
A) the sum of consumer surplus and producer surplus is maximized. B) consumer surplus is equal to producer surplus. C) consumer surplus is less than producer surplus. D) consumer surplus is greater than producer surplus. E) total revenue is maximized.
An exporter can hedge against the possible decline in a foreign currency by purchasing
A) put options on the currency. B) call options on the currency. C) the currency on the spot market. D) currency on forward contracts.
This figure displays the choices and payoffs (company profits) of two music shops-MiiTunes and The Rock Shop. MiiTunes is an established business in the area deciding whether to charge its usual high prices or to charge very low prices, in the hopes that a new business will not be able to make a profit at such low prices. The Rock Shop is trying to decide whether or not it should enter the market and compete with MiiTunes.According to the figure, if The Rock Shop enters the market, MiiTunes should:
A. leave the market. B. give an ultimatum to The Rock Shop. C. charge a high price. D. charge a low price.