Profit-sharing royalty scheme with the stall holders

Assignment Help Microeconomics
Reference no: EM13698942

Crepe Creations is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is five miles long. CC estimates that on an average day there are 1,000 sunbathers evenly spread along the beach and that each sunbather will buy one crepe per day provided that the price plus any disutility cost does not exceed $5. Each sunbather incurs a disutility cost of getting up from resting to get a crepe and returning to their beach spot of 25 cents for every 1/4 mile the sunbather has to walk to get to the CC stall. Each crepe costs $0.50 to make and CC incurs a $40 overhead cost per day to operate a stall. How many franchises should CC award given that it determines the prices the stall holders can charge and that it will have a profit-sharing royalty scheme with the stall holders? What will be the price of a crepe at each stall?

Reference no: EM13698942

Questions Cloud

Consider the market for carbonated water : Consider the market for carbonated water and suppose that demand is given by D(p) = 100 – 5p There are only two firms producing carbonated water, each with the same constant unit cost c = 2.
Explain why there is a blurry line dividing objects : Explain why there is a blurry line dividing objects that are “money” from those that are not. Give examples of some clear-out cases? And some borderline ones. Could the position of this blurry line change over time?
Double declining balance depreciation schedules : Jack’s construction company is considering the purchase of new equipment at a cost of $10,500; with an estimates salvage value of $500 and projected useful life of 4 years. Determine the straight-line (SL), sum of year's- digit (soyd) and double decl..
What are the ex-post real interest rates : Assume that the inflation rates in 2010, 2011, and 2012 were 1%, 2%, and 3% respectively. During the same periods, nominal interest rates were 5%, 5%, and 6%, respectively. What are the ex-post real interest rates in 2010, 2011, and 2012?
Profit-sharing royalty scheme with the stall holders : Crepe Creations is considering franchising its unique brand of crepes to stall-holders on Hermoza Beach, which is five miles long. CC estimates that on an average day there are 1,000 sunbathers evenly spread along the beach and that each sunbather wi..
What first cost should be assigned to the existing system : A material handling system was purchased 3 years ago for $120,537. Two years ago it required substantial upgrading at a cost of $14,340. It once again is requiring an upgrading cost of $24,925. Alternately, a new system can be purchased today at a co..
Why is the unrestricted entry of new firms to all markets : Why is the unrestricted entry of new firms to all markets necessary to assure the efficient allocation of resources in the long run?
Model of the money supply under fractional-reserve banking : To increase tax revenue, the US government in 1932 imposed a two-cent tax on checks written on deposits in bank accounts (In today’s dollars, this tax was about 25 cents per checks)
Decreasing return-to-scale technology : Using graph, illustrate the effect of an increase of the input price on the production and profit of a one input-one output firm with decreasing return-to-scale technology?

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd