Answer to Question #62072 in Microeconomics for Benjamin Logan

Question

1.McDonald's recent technological innovations have allowed them to reduce the marginal cost of their burgers while the market price remained unchanged. Assume the market for McDonald's burgers is perfectly competitive.
Which of the following statements are true:

Marginal revenue per burger will be lower.

Marginal revenue per burger will be unchanged.

The demand for burgers, faced by a particular store, will no longer be perfectly elastic.

The profit maximising quantity of burgers will be where the marginal cost equals the burger price.

Answer 1

2. Marginal revenue per burger will be unchanged.
(It is equal to the price of burger, and it remained unchanged)

4. The profit maximizing quantity of burgers will be where the marginal cost equals the burger price.