Q1. "IBM should never sell its product for less than it expenses to produce." If "costs to produce" is interpreted to mean IBM's average total price is this correct? If it is interpreted to mean average price variable is the statement correct? If it is interpreted to mean marginal cost, is the statement correct?
Q2. Illustrate what closing time should Citywide Spirits Shoppe choose to maximize profits? Compute the increase in profits (relative to the current closing time of 10pm) that would result from extending store hours to 4am. If you recommend a different closing time, compute the increase in profits (again relative to the current closing time) that would result from your recommendation.