Question 2 (b) Ebo is the owner of medium-sized company that assembles personal computers in Ghana....

Question 2 (b)

Ebo is the owner of medium-sized company that assembles personal computers in Ghana. He purchase most of the components for the company such as random access memory (RAM) on a competitive market. In order to maximise profit in the short run, he employed an economist to estimate the demand curve, which he was able to use to derive the marginal revenue (MR) from his product as: ?? = 70 − 16?. The economist also derived the marginal cost function (MC) as: ?? = 6? − 51.

(i) Find the total revenue function and deduce the corresponding demand equation.

(ii) Find the total cost function if the fixed cost is 400.

(iii) Determine the number of laptops that maximizes the company’s profit. (iv) Howmuchshouldthefirmchargeforonecomputer?

(v) Find the total profit at the profit maximizing level of output.

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Expert Solution

Rahul Sunny answered 2 months ago

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