Question
We are looking at a company that offers its goods in a market with well-functioning competition. The company's cost function C (x) can be written
We are looking at a company that offers its goods in a market with well-functioning competition. The company's cost function C (x) can be written
C = 0.5cx ^ 2 + F
Where x is production, F is fixed costs, and c is a given positive number
a)
Calculate the marginal cost (marginal cost) for this cost function.
b)
Does the cost function express a constant, decreasing or increasing scale yield?
The company's profit can be expressed by profit function n (x).
n (x) = Px - C (x) = Px - 0,5cx ^ 2 - F
where P is the product price.
Assume that the company maximizes profits
c)
Find your company's customization
d)
Find an expression of the company's profit as a function of the product price P, parameter c and fixed costs F
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