Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

better with more clear explanation thx so much Bibi Mobile is the only authorized producer in producing smart phone in Country X which is a

better with more clear explanation thx so much

image text in transcribed
Bibi Mobile is the only authorized producer in producing smart phone in Country X which is a small country. Its annual revenue is $4,000,000 and the average total cost per smart phone produced is $5,000. The marginal revenue function and the marginal cost functions are as below: Marginal Revenue function: MR = 12,000 - 10Q. Marginal Cost function: MC = 2,000 + 150. where Q represents quantity. (a) Define the market structure of Bibi Mobile. (2 marks) (b) State the profit maximization condition. According to this condition based on the given information, calculate the profit maximizing price and quantity of Bibi Mobile? What is the total profit (loss) earned by this company? (4 marks) (c) Based on the given information and your answers in part (b), illustrate the situation with a diagram and label the critical data related to price, quantity, cost and profit (loss) condition in the diagram. No explanation is needed. (3 marks) (d) Suppose there is an increase in the minimum wage in Country X and most of the workers are paid on this wage level in Bibi Mobile. Bibi Mobile has recorded a break-even state of profitability afterwards. Illustrate this situation in the same diagram of part (c). Explain. (6 marks)

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

Consumer Behaviour

Authors: Evans, Martin Evans

2nd Edition

0470994657, 9780470994658

More Books

Students also viewed these Economics questions

Question

understand possible effects of lifestyle risk factors;

Answered: 1 week ago

Question

Food supply

Answered: 1 week ago

Question

Mortality rate

Answered: 1 week ago