Answered step by step
Verified Expert Solution
Question
1 Approved Answer
sam internet services has the following short-run cost curve: C(q,K) = 25q^2/ K^2/3 sams output level, K is the number of servers she leases and
sam internet services has the following short-run cost curve: C(q,K) = 25q^2/ K^2/3 sams output level, K is the number of servers she leases and r is the lease rate of servers. sam's short-run marginal cost function is: 50q/K^2/3 . Currently, sam leases 8 servers, the lease rate of servers is $15, and sam can sell all the output she produces for $500. Find Laura's short-run profit maximizing level of output. Calculate sam profits. If the lease rate of internet servers rise to $20, how does sam's optimal output and profits change?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started