Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 am the proud owner of a big lexas company that manufactures and sells oil barrels. I've got a guy who compiled enough data to

image text in transcribed
image text in transcribed
1 am the proud owner of a big lexas company that manufactures and sells oil barrels. I've got a guy who compiled enough data to fill my 10-gallon hat, but don't know nothing about how to use the equations he came up with. This is all that he can tell me for sure: - The demand for oil barrels is given by the equation: 2p2,400,000=2q3446q2800q where p is the price (in dollars) we charge per million barrels and q (in millions of barrels) is the number of barrels we sell. - The cost (in dollars) we produce q millions of barrels is given by the equation: C=q4250q3+20,000q2+500q+1,500. million barrels. So, here's what I'd like to know: - Right now, we're slated to produce 20 million barrels. Am I even going to make a profit? production level? - I've been trying to get a better handle on my margins. What's the formula for my marginal cost (in dollars per million barrels) and marginal revenue (in dollars per million barreis)? At what production level is my marginal cost the most and where is it the least? - Lastly, let me be a straight-shooter with y'all. I really only care about profit. At what level of production is my profit the most? Thanks for aii your neip. Sincerely, JRex Wyme J. Rex Wynne, Owner Wynne Barrels Answer all questions and show all of your work. Answers which are not justified with appropriate work will receive 0 points. All calculations performed using a calculator must be shown to receive any credit. 1. Rex Wynne informs you that his company, Wynne Barrels, is slated to produce 20 million barrels of oil and needs to know whether he is going to make a profit. In addition. Wynne Barrels also needs to know a general equation to find the profit at any given production level. (a) (2 points) Solve the following equation that models the oil barrel production 2p2,400,000=2q3446q2800q for price p to determine the price-demand equation. (b) ( 2 points) Find the revenue function R(q)=pq. (c) (2 points) Find the profit function P(q)=R(q)C(q). (d) (2 points) Is Wynne Barrels making a profit at a production level of 20 million barrels? If so, what is the company's profit

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing In Plain English A Simple Guide To Super Effective ISO Audits

Authors: Craig Cochran

1st Edition

1932828168, 978-1932828160

More Books

Students also viewed these Accounting questions