Author Question: Fast Food Terminals Taco Casa is considering installing touch screen terminals for patrons to place ... (Read 129 times)

beccaep · **on:** Jul 1, 2018

Fast Food Terminals Taco Casa is considering installing touch screen terminals for patrons to place their food orders. They discovered that installation costs at stores with four screens were 60,000 but were 80,000 at stores with six terminals. What are the marginal costs of installing another terminal at a location?

Question 2

For products like parking lots and hotels, costs of building capacity are mostly fixed or sunk and firms in this industry typically face capacity constraints. Therefore,
a. If SRMR>SRMC at capacity, then the firms should price to fill capacity
b. If SRMR c. If LRMR>LRMC at capacity, then the firms should price to fill capacity
d. If LRMR>LRMC at capacity, then the firms should price to fill capacity

14vl19 · **Reply #1 on:** Jul 1, 2018

Answer to Question 1

FC + 4MC = 60,000 and FC + 6MC = 80,000 . Subtracting the first equation from both sides yields 2MC = 20,000 or MC = 10,000.

Answer to Question 2

a