Quiz-PSet-VII

Quiz-PSet-VII - 3 (i) What is the outlet’s optimum daily...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
ARE 100A Quiz on Problem Set VII March 5 2010 Richard Howitt Name……………………………. . Section……………………………. . Assume that the average selling price for a coffee (Latte) from a Starbucks outlet sold for $5.56 in 2007. If the daily quantity Q is measured in 100 cup units (ie for 100 cups Q = 1), and the individual Starbucks outlet has a short run cost function of: C = 6Q - Q 2 + 0.107 Q
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 3 (i) What is the outlet’s optimum daily quantity to produce in 2007 ? ( ii ) If the monthly fixed cost is $20,000 ( assume 30 days in a month) what is the monthly net return per outlet to Starbucks when coffee sells for $5.56/cup. (iii) If due to competition and the economy, the selling price of a cup of coffee drops to $3.25 in 2010, what is the outlet’s optimum daily quantity to produce in 2010 ?...
View Full Document

This note was uploaded on 10/25/2010 for the course ARE 100A taught by Professor Constantine during the Winter '08 term at UC Davis.

Ask a homework question - tutors are online