Homework Soursea Jims Burgers produces 600 burgers per week Each burger sel
a.) Jim’s Burgers produces 600 burgers per week. Each burger sells for $3. Goody Candy orders 500 burgers for its upcoming office party from Jim’s Burgers. Jim decided to accept the order for $1250 lump sum. What would be the marginal revenue per burger for this order?
b.) At the current level of production, if the firm’s MR>MC, then the firm should?
Solution
a) MR per burger given the lumpsome payment = 1250/500 = 2.5
b) if MR>MC then the firm is making profits and hence should expand in long run
