Kate’s 24-Hour Breakfast Diner menu offers one item, a $5.00 breakfast special. Kate’s variable costs (e. g., servers, cooks, electricity, food, etc.) per meal average $3.95. Her fixed costs (e. g., rent, insurance, cleaning supplies and business license) per meal average $1.25. Since the market is highly competitive, Kate should: Group of answer choices raise her prices above the perfectly competitive level set by the market. keep the business open in the short-run, and plan to expand the business in the long-run. lay-off her staff, break her lease, and close the business down immediately. keep the business open in the short-run, but plan to go out of business in the long-run.

Suppose life expectancy in years (l) is a function of two inputs, health expenditures (h) and nutrition expenditures (n) in hundreds of dollars per year. the production function is upper l equals ch superscript 0.40 baseline upper n superscript 0.60l=ch0.40n0.60. beginning with c = 1, a health input of $400400 per year (hequals=44) and a nutrition input of $400400 per year (nequals=44), show that the marginal product of health expenditures and the marginal product of nutrition expenditures are both decreasing. the marginal product of health expenditures when h goes from 44 to 55 is nothing, and the marginal product of health when h goes from 66 to 77 is nothing. (round your answers to three decimal places.)