C the tennis court management company is thinking of

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c) The tennis court management company is thinking of letting members play as much tennis as they wish for a flat weekly fee with no hourly rental. What is the maximum weekly fee the Andersons would be willing to pay?
Question 8: With respect to production, what is the difference between the short-run and the long-run?
Question 9: Explain the difference between accounting profits and economic profits.
The implicit costs are the opportunity cost of the resources used in the production of a good or service. Two common examples are the value of the owner’s ti me dedicated to the business (minus any salary or other forms of payment) and the financial capital used (adjusted for risk). Since there are always implicit costs, economic profits will be less than accounting profits. If economic profit is positive, then the Total Revenue is greater than [Explicit + Implicit costs]. This means that the business is earning a return to its resources that exceeds the opportunity cost of those resources. The resources would earn a lower return in their next best alternative use. If economic profit is zero, then the Total Revenue is equal to [Explicit + Implicit costs]. This means that the business is earning a return to its resources equal to the opportunity cost of those resources. The resources can’t do better by switching to the next best alternative use of those resources (they will do the same). If economic profit is negative, then the Total Revenue is less than [Explicit + Implicit costs]. This means that the business is earning a return to its resources less than the opportunity cost of those resources. The resources can do better by switching to the next best alternative use of those resources. If possible, these resources should be switched to the next best alternative use. So positive accounting profits do not indicate that the resources are being used to their fullest. This is because it is possible that the implicit costs are greater than the accounting profits, which indicates that the resources should be used in the next best alternative way. Further Questions for Chapter 7 Content: Questions on MyEconLab.

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