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Your Family Operates Voltaire's Pizza, Which Ships Frozen Hand-Made Pizzas

Question 80

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Your family operates Voltaire's Pizza, which ships frozen hand-made pizzas by over-night delivery to homes within 500 miles of your city. You are asked to determine the optimal monthly advertising expenditures for the business. The total monthly cost of pizza production is Your family operates Voltaire's Pizza, which ships frozen hand-made pizzas by over-night delivery to homes within 500 miles of your city. You are asked to determine the optimal monthly advertising expenditures for the business. The total monthly cost of pizza production is where A is the advertising expenditure. The firm's marginal revenue from advertising is constant at , and the advertising elasticity of demand is 0.3. a. What is the firm's marginal cost of production (MC)? What is the firm's full marginal cost of advertising (as a function of Q and A)? b. Suppose you know the profit maximizing level of output is Q = 9,000 pizzas per month. What is the firm's optimal level of advertising expenditure? where A is the advertising expenditure. The firm's marginal revenue from advertising is constant at Your family operates Voltaire's Pizza, which ships frozen hand-made pizzas by over-night delivery to homes within 500 miles of your city. You are asked to determine the optimal monthly advertising expenditures for the business. The total monthly cost of pizza production is where A is the advertising expenditure. The firm's marginal revenue from advertising is constant at , and the advertising elasticity of demand is 0.3. a. What is the firm's marginal cost of production (MC)? What is the firm's full marginal cost of advertising (as a function of Q and A)? b. Suppose you know the profit maximizing level of output is Q = 9,000 pizzas per month. What is the firm's optimal level of advertising expenditure? , and the advertising elasticity of demand is 0.3.
a. What is the firm's marginal cost of production (MC)? What is the firm's full marginal cost of advertising (as a function of Q and
A)?
b. Suppose you know the profit maximizing level of output is Q = 9,000 pizzas per month. What is the firm's optimal level of advertising expenditure?

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a.The marginal cost of production is MC ...

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