Microeconomics 6th Edition by Robert Hall, Shirley Kuiper, Marc Lieberman

Exercise 10

Tino owns a taco stand in Houston,Texas,where there are dozens of other taco stands. He faces the following demand and cost schedules for his taco plates (two tacos and a side of refried beans):
a. Fill in the columns for total revenue,marginal revenue,and marginal cost and use the table to find the profit-maximizing price and the profitmaximizing number of taco plates per week for Tino's Taco Stand. (Remember to put MR and MC between output levels.)b. Redo the table to show what will happen in the short run if Tino spends $100 on an advertising campaign that increases the quantity demanded at each output level by 20 percent. What will happen to his profit-maximizing price and profitmaximizing number of taco plates per week? Do you expect this outcome to persist? Explain.