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Consider the Following Scenario to Answer the Questions That Follow

Question 50

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Consider the following scenario to answer the questions that follow.
The Varsity,located in downtown Atlanta,is the world's largest drive-in restaurant.Located near the Georgia Tech campus,the drive-in attracts two distinct types of customers: college students and visitors to Atlanta.The owners are considering offering a student discount of $1 off their combo meal,which is regularly priced at $9.There are 5,000 students interested in purchasing a combo meal,with a maximum willingness to pay of $8.There are 5,000 visiting customers interested in purchasing the combo meal,with a maximum willingness to pay of $9.Assume that each customer,at most,will purchase a single meal and the marginal cost is $5.
-Consider the accompanying table.You are the only provider of bottled water for three cities.Because you have access to a natural spring,the marginal cost to produce an additional bottle is $0.How many bottles of water would you need to produce to maximize your profits and at what price would you sell it? Consider the following scenario to answer the questions that follow. The Varsity,located in downtown Atlanta,is the world's largest drive-in restaurant.Located near the Georgia Tech campus,the drive-in attracts two distinct types of customers: college students and visitors to Atlanta.The owners are considering offering a student discount of $1 off their combo meal,which is regularly priced at $9.There are 5,000 students interested in purchasing a combo meal,with a maximum willingness to pay of $8.There are 5,000 visiting customers interested in purchasing the combo meal,with a maximum willingness to pay of $9.Assume that each customer,at most,will purchase a single meal and the marginal cost is $5. -Consider the accompanying table.You are the only provider of bottled water for three cities.Because you have access to a natural spring,the marginal cost to produce an additional bottle is $0.How many bottles of water would you need to produce to maximize your profits and at what price would you sell it?   A) 11 bottles at $11 each B) 10 bottles at $10 each C) 15 bottles at $7 each. D) 8 bottles at $12 each E) 15 bottles at $7 each


A) 11 bottles at $11 each
B) 10 bottles at $10 each
C) 15 bottles at $7 each.
D) 8 bottles at $12 each
E) 15 bottles at $7 each

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