Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hello I looking for this problems + the question F and G thank you The cost function (monthly) for your company can be definedas; TC

Hello I looking for this problems + the question F and G thank you The cost function (monthly) for your company can be definedas; TC = cost per unit (AC)quantity supplied (). Suppose thecost per unit (average cost) for your firm can be described as AC= (1,200/0) + 1000 + 0.250:a.What is the total cost function for your firm in terms ofQ?b.How would you interpret the intercept term in thisfunction?What is the marginal cost function for your firm?At what level of output (Q) is AC minimized?Is MC always less than AC?F) Combine the total revenue function from problem 1 andtotal cost function from this problem and derive the profit-maximizing (net-benefit maximizing) level of output and theprice that would be charged.G)Why is the output level at this point smaller than theoutput level that maximizes total revenue from problem 1,part e?

image text in transcribed
Problem 1: "Benefits" from operating a business are the revenues that are generated from sales. The monthly total revenue function for a company can be defined as; TR = Price (P) ' Quantity Demanded (Q). If the monthly ordinary demand function for your firm is O = 800 - 2P: a. What is the total revenue function for this firm in terms of Q (TR needs to be a function of Q, not P)? b. What is the average revenue function for this firm in terms of Q? C. What is the MR function for this firm in terms of O? d Show that MR will be less than AR for any positive level of Q. Why is that? Give an interpretation for this result. e. What is the quantity level that maximizes total revenue? What is the price that must be charged to maximize total revenue

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

Step: 3

blur-text-image

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

Economic Change In Asia Implications For Corporate Strategy And Social Responsibility

Authors: M Bruna Zolin, Bernadette Andreosso O'Callaghan, Jacques Jaussaud

1st Edition

1317286650, 9781317286653

More Books

Students also viewed these Economics questions

Question

Write a system of two equations that has a solution of (-1.4, 3.6).

Answered: 1 week ago