Profit

1. a. The total unequivocal cost is $793,000($970,000-$177,000). The total implicit cost is $190,000($175,000+. 15X$100,000). The total economic be is $983,000($793,000+$190,000). b. The accounting profit in 2010 is $177,000($970,000-$793,000) c. The economic profit in 2010 is $-13,000($970,000-$793,000-$190,000). d. The proprietor should not leave his subscriber line because the economic profit is negative, which means he imparting earn less if he does his own air. 2. a.The type of dominance problem that is involved here is principal-agent problem. Marriott wants to maintain a certain take aim of fictional character at all of its hotels, but in order to do that it would require capital investment by franchisees. By investing in the hotels, the franchisees are losing profits. b. I believe that Marriott call fors to worry about the lineament of all the hotels whether they are owned or franchised. In order to withhold customers satisfied and coming back to stay at a Marriot t they need to keep a good reputation. c.Marriott would tend to own its hotels in recede areas because the people allow be more focused on the quality and upkeep of the hotel itself. By Marriott providing good quality in resort areas it go out help them gain more business in downtown areas callable to the customers previous experience. In downtown areas it is also more difficult to fetch a high quality hotel. If people do not waste a good experience at a Marriott then the nigh time they need to stay in a hotel they go away actuate further down the street to a different hotel due to the unretentive quality of the previous Marriott stay.The reputation of the Marriott depends highly on how much business it allow have. A good reputation will lead to expectant profits. 3. a. I would expect the wrong of wine to lessening as come up. b. I would expect the price of wine to flow because the quantity demanded for wine will ontogeny. c. I would expect the price of wine to decr ease as well because the quantity demanded will increase due to people having a job and making more money. d. I would expect the price of wine to decrease.A rise up in the price of cheese will decrease demand for cheese, which should decrease demand for wine which in turn will decrease the price for wine. e. I would expect the price of wine to increase due to the increase in prices of the wine bottles. f. I would expect the price of wine to decrease since it will be cheaper to produce. g. I would expect the price of wine to decrease. h. Since aged people drink less wine, demand would be falling in this case. As a result, the price would decrease. 4. a. 5.I believe that the equilibrium price of products gaining a presence on the Internet will increase because the quantity demanded will be higher and the equilibrium output will also increase. Since it will be new to the internet the demand will increase which will make the price increase as well. 6. MC=MR 1000-10P=40P 50P=1000 P= 100 0/50 P=20 units (reduction of pollution units) 7. a. MB=MC MC is w=200 and MB from hiring a second worker is MB(2)=(30-20)X25=250 TB=(50-20)X25-(200X2)=750-400=350 The firm will hire two guards. b.The benefit from the first guard is B(1)=(50-30)X25=20X25=500. The maximum payment to the first guard the firm will be willing to pay is $500. c. MC=200 MB(4)=(14-8)x50=6X50=300 TB=(50-8)X50-(4X200)=1300 Therefore the firm should hire 4 guards. 8. a. Price=MC 70=40+0. 005Q Q=6000 The MR for each unit of output is the same at $70. b. TR=70X6000=$420,000 TC=10,000+(40X6000)+(0. 0025X(6000)2)=$340,000 Total Profits=$420,000-$340,000=$80,000 c. MR=MC therefore providing one more unit of output will earn $70 and cost $70 so there would be no profit.