Question

Doug Walker's long run daily total cost function for providing dog walking services is $C(y) = 64 + 4y + y^2$ , for all $y > 0$ , where y is hours per day of dog walking services provided, and $C(0) = 0$ Thus, in the long run, the $64 cost is an overhead cost that is avoided if Doug chooses not to provide any dog walking services on a given day. What is the lowest market price for an hour of dog walking services that would induce Doug to provide dog walking services in the long run?

          Doug Walker's long run daily total cost function for providing dog walking services is
$C(y) = 64 + 4y + y^2$
, for all
$y > 0$
, where
y
is hours per day of dog walking services provided, and
$C(0) = 0$
Thus, in the long run, the $64 cost is an overhead cost that is avoided if Doug chooses not to provide any dog walking services on a given day.
What is the lowest market price for an hour of dog walking services that would induce Doug to provide dog walking services in the long run?

Show more…

Doug Walker's long run daily total cost function for providing dog walking services is
C(y) = 64 + 4y + y^2
, for all
y > 0
, where
y
is hours per day of dog walking services provided, and
C(0) = 0
Thus, in the long run, the 64 cost is an overhead cost that is avoided if Doug chooses not to provide any dog walking services on a given day.
What is the lowest market price for an hour of dog walking services that would induce Doug to provide dog walking services in the long run?

Added by Matthew J.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Mauya Mitchell

11/14/2023

Step 1

The firm will provide services if the revenue is greater than or equal to the cost. Let $p$ be the market price per hour of dog walking services. The revenue is given by $R(y) = py$. The firm will provide services if $R(y) \ge C(y)$, which means $py \ge 64 + 4y + Show more…

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Question 4 Doug Walker's long run daily total cost function for providing dog walking services is $C(y) = 64 + 4y + y^2$ , for all $y > 0$ , where $y$ is hours per day of dog walking services provided, and $C(0) = 0$ Thus, in the long run, the $64 cost is an overhead cost that is avoided if Doug chooses not to provide any dog walking services on a given day. What is the lowest market price for an hour of dog walking services that would induce Doug to provide dog walking services in the long run?

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