Answer to Question #107498 in Microeconomics for sukhmanjot kaur18

Question

c. Jimmy’s landlady complains about all the visitors coming into the building and tells Jimmy to stop selling peeps; Jimmy finds out, though, that if he gives her $0.20 per peep she’ll stop complaining. What effect does this bribe have on Jimmy’s marginal cost per peep? What is the new profit-maximizing quantity of peeps? What impact does this bribe have on Jimmy’s total profit?
Price of Peep 1.20, 1.00 ,0.90, 0.80 ,0.70 ,0.60, 0.50, 0.40, 0.30, 0.20, 0.10
Quantity Demanded 0 100 150 200 250 300 350 400 450 500 550

Answer 1

What effect does this bribe have on Jimmy’s marginal cost per peep? Answer: Increase by 50with optimal sales

What is the new profit-maximizing quantity of peeps? Answer: 250

What impact does this bribe have on Jimmy’s total profit?  Answer: 125