Donny, of Donny's Doughnuts, bakes and sells 100 dozen doughnuts a day using one mixer and one fryer. His rival, Sunshine, of Sunshine's Doughnuts, produces 180 dozen doughnuts a day using two mixers and two fryers. Both shops use the exact same technology to make doughnuts and have the same number of workers and the same size building. Donny and Sunshine both increase their capital equipment by one mixer and one fryer. Which shop will benefit the most from its expansion? a. Sunshine, because her operation was producing more doughnuts to start with. b. Donny, because his workers currently have less available capital to work with. c. The local weight‑loss clinic, because the number of doughnuts consumed will increase. d. The shops will benefit equally because they are using the same quantity of equipment.   How much should Donny realistically expect his production to increase with the new equipment? a. about 50 dozen b. at least 100 dozen c. about 80 dozen   How much should Sunshine realistically expect her production to increase with the new equipment? a. about 50 dozen b. at least 80 dozen c. at least 100 dozen

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
Related questions
Question

Donny, of Donny's Doughnuts, bakes and sells 100 dozen doughnuts a day using one mixer and one fryer. His rival, Sunshine, of Sunshine's Doughnuts, produces 180 dozen doughnuts a day using two mixers and two fryers. Both shops use the exact same technology to make doughnuts and have the same number of workers and the same size building.

Donny and Sunshine both increase their capital equipment by one mixer and one fryer.

Which shop will benefit the most from its expansion?
a. Sunshine, because her operation was producing more doughnuts to start with.
b. Donny, because his workers currently have less available capital to work with.
c. The local weight‑loss clinic, because the number of doughnuts consumed will increase.
d. The shops will benefit equally because they are using the same quantity of equipment.
 
How much should Donny realistically expect his production to increase with the new equipment?
a. about 50 dozen
b. at least 100 dozen
c. about 80 dozen
 
How much should Sunshine realistically expect her production to increase with the new equipment?
a. about 50 dozen
b. at least 80 dozen
c. at least 100 dozen
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Multiple Equilibria
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education