Business, 05.06.2020 15:59 YoungLarQ

A small fast-food restaurant is automating its burger production. The owner needs to decide whether to rent a machine that can produce up to 2,000 hamburgers per week at a marginal cost of $1 per burger (excluding the cost of ingredients) or another machine that can also make up to 2,000 burgers per week but at a marginal cost of $0.50 per burger (again, excluding the cost of ingredients). The weekly lease for the machine with the higher marginal cost is $2,300. The weekly lease for the machine with the lower marginal cost is $2,760. The restaurant can sell burgers for $10 per burger, and the cost of ingredients for each burger is $2.

Suppose the restaurant leases the machine with the higher marginal cost for the first week and sells 2,000 burgers that week. The restaurant owner earned profits of $ in the first week.

Suppose now the restaurant leases the machine with the lower marginal cost for the second week and again sells 2,000 burgers that week. The restaurant owner earned profits of $ in the second week.

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A small fast-food restaurant is automating its burger production. The owner needs to decide whether...

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