Subject :-MANAGERIAL ECONOMICS (ECO404)

Note:-Solve these question and please explain in detail in such a way that i will get 10/10 marks.

The Case: Mr. Malik has been working at Cambridge school system with the fixed salary of Rs. 30, 000. He decided to quit the job to start his own business of fans production. The school offered him new salary of Rs. 45,000 to change his decision. He decided to start the business and left the job. Mr. Malik has prepared a feasibility report of starting his new business. Capital to be used in the production Rs. 1,000,000 Cost of 20 laborers Rs. 20,000 per worker per month Advertising expenses to print 1000 | Rs. 20 per unit brochure of the product Expected production 234 units for the first month Further, he also estimated the following price equation and average cost equation. P = 450 - 0.005Q AC = 3500 / Q +25 +0.02Q He is so passionate about his business and want to use online techniques in future so that his sales may increase to manifold.Requirement: Being a student of managerial economics, analyze the above case carefully and answer the following questions: a) What is the opportunity cost of doing business for Mr. Malik? b) What is the total economic cost to Mr. Malik at the current level of production? C ) Find out the optimal level of output by using price and average cost equations