P2.6 Profit Maximization: Equations.

21st Century Insurance offers mail-order automobile insurance to preferred-risk drivers in the Los Angeles area. The company is the low cost provider of insurance in this market but doesn't believe its annual premium of $1500 can be raised for competitive reasons. Rates are expected to remain stable during coming periods; hence, P =M R =$1500. Total and marginal costrelations for the company are as follows

TC= $41 000000 + $5000 + $0.00502

MC = $500 + $0.01 Q

A. Calculate the profit-mnximizing activity level.

B. Calculate the company's optimal profit, and optimal profit as a percentage of sales revenue (profit margin).

P2.7

A. Fill in the missing data for price (P), total Revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), etc.

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P2.6 Profit Maximization: Equations. 21st Century Insurance offers mail-order automobile insurance to preferred-risk drivers in the Los Angeles area. The company is the low- cost provider of insurance in this market but doesn't believe its annual premium of $1500 can be raised for competitive reasons. Rates are expected to remain stable during coming periods; hence, P = MR =$1500. Total and marginal cost relations for the company are as follows TC = $41 000 000 + $500Q + $0.005Q2 MC = aTC/aQ = $500 + $0.010 A. Calculate the profit-maximizing activity level. B. Calculate the company's optimal profit, and optimal profit as a percentage of sales revenue (profit margin). P2.7 A. Fill in the missing data for price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), profit (), and marginal profit (MT) in the following table: TR = P X Q MR = QTR/ Q MC = ATC/ P(E) ($) MT = AT/ aQ ($) TC ($) OQ ($) TT ($ ) aQ ($) JOUAWN-O 160 0 0 150 150 0 150 0 25 25 140 125 125 55 390 30 100 35 300 75 90 130 110 550 350 175 600 50 630 55 370 80 290 $40 60 - 30 355 285 600 75 -85 525 Dipindai dengan CamScanner