Question

In: Economics

I've completed a-d, I need answers for E-H, please! The demand for product Q is given...

I've completed a-d, I need answers for E-H, please!

The demand for product Q is given by Q = 385 - P and the total cost of Q by: STC=3000+40Q-5Q^2 +(1/3)Q^3

Find the price function and then the TR function. See Assignment 3 or 4 for an example.

Q = 385 - P

P = 385 - Q

Total revenue (TR) = P x Q = 385Q - Q²

Write the MR and MC functions below. Remember: MR = dTR/dQ and MC = dSTC/DQ. See Assignment 5 for a review of derivatives.

MR = dTR/dQ = 385 - 2Q

MC = dSTC/dQ = 40 - 10Q + Q²

What positive value of Q will maximize total profit? Remember, letting MR = MC signals the objective of total profit maximization. Solve MR = MC for Q. The value of Q you get should not be zero or negative.

385 - 2Q = 40 - 10Q + Q²

Q² - 8Q - 425 = 0

Q² - 25Q + 17Q - 425 = 0

Q(Q - 25) + 17(Q - 25) = 0

(Q - 25) (Q + 17) = 0

Therefore, Q = 25, Q = -17

We dismiss Q=-17 because it is zero or negative, leaving

Q=25 will maximize total profit

Use the price function found in (a) to determine the price per unit that will need to be charged at the Q found in (c). This will be the price you should ask for the total profit maximizing quantity.

P = 385 - Q = 385 - 25 = 360

What total profit will result from selling the quantity found in (c) at the price found in (d)? Remember, profit is TR – STC.
At what level of Q is revenue maximized? Remember let MR = 0 and solve for Q. MR = 0 signals the objective of maximizing revenue.
At what positive level of Q is marginal profit maximized? You found the profit function in (e) above. Marginal profit is the first derivative of the profit function (e). Next, find the derivative of marginal profit, set it equal to zero, and solve for Q.
What price per unit should be charged at the quantity found in (g)? Simply plug the Q you got in (g) into the same price function you found in (a) and also used in (d).

Solutions

Expert Solution

Answer Summary

e. Total Profit = 2916.67

f. Revenue maximised at Q = 192.5

g. Marginal profit maximized at Q = 4

h. Price at output found in 'g' part P = 381

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

I KNOW THOSE ANSWERS BUT I NEED HOW TO SOLVE Q1 ANSWER E(1487) Q B Q...

I KNOW THOSE ANSWERS BUT I NEED HOW TO SOLVE Q1 ANSWER E(1487) Q B Q 1 What is the equilibrium constant for the reaction shown below? glutathione + NADPH + H+ ↔ reduced glutathione + reduced glutathione + NADP+ A. 1.073 B. 1,487 C. 17.4 D. 0.073 E. 7.03 2. Under standard conditions, is the oxidation of NADH by free FAD sufficiently exergonic to drive the synthesis of ATP? no, as oxidation of NADH by FAD only generates –9.65...

I only need D E and F answered I have completed the rest Consider two countries:...

I only need D E and F answered I have completed the rest Consider two countries: Canada (CAN) and Iceland (ICE). Two goods can be produced: gloves (g) and socks (s). Goods are produced only using labour, and the unit labour requirements of the two goods in each country are given in the following table: ??????= 2 ??????= 8 ??????= 3 ??????= 6 Assume that Canada has 3000 units of labour, while Iceland has 1500 units of labour. When setting...

Please fill in the blanks (values of A, B, C, D, E, F, G, H, I...

Please fill in the blanks (values of A, B, C, D, E, F, G, H, I , J) for the following financial statements. The firm’s tax rate is 35.3%. Income Statement for Fiscal Year 2015 Sales 2,000 Cost of goods sold 1,500 Gross margin 500 Selling and general expenses 300 Operating income 200 Interest income 5 205 Interest expense 21 Restructuring charges 14 Income before tax 170 Income tax 60 Net income J Balance Sheet, Year 2014 and Year 2015...

Consider the following demand curve: A B C D E F G H I J P...

Consider the following demand curve: A B C D E F G H I J P $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 QD 1 2 4 6 9 12 16 20 25 30 Calculate elasticities for pairs of points to check statements that were made during class and in the text. When making the calculations, use average price and average quantity for the two points. The formula for this should be in your notes. It is...

Given the following info I need to: 1. Journalize the transactions (I've done some of it,...

Given the following info I need to: 1. Journalize the transactions (I've done some of it, i just need the dr/cr values). DATE ACCOUNT TITLES/EXPLANATION DEBIT CREDIT Jan. 15 Cash Dividends Dividends Payable Feb. 15 Dividends Payable Cash Apr. 15 Stock Dividends Common Stock Dividends Distributable Paid-in Capital in Excess of Par Value - Common Stock May 15 Common Stock Dividends Distributable Common Stock Dec. 1 Cash Dividends Dividends Payable Dec. 31 Income Summary Retained Earnings Dec. 31 Retained Earnings...

please i need the solve for A&B&C&D&E ESPECIALLY B&C&D&E Company Information Wood Work Ltd manufacture specialist...

please i need the solve for A&B&C&D&E ESPECIALLY B&C&D&E Company Information Wood Work Ltd manufacture specialist wood furniture and sell their products all over Saudi Arabia. The company was established three years ago in Jeddah and is performing well to date. Wood work Ltd have three main product lines; TV tables, dining table and chairs. The following financial information has been provided. Financial Information TV tables dining Tables Chairs Selling Price per unit SAR 1,000 SAR 5,000 SAR 700 Direct Materials (wood...

I have A B and C answered I only need the answer to D and E....

I have A B and C answered I only need the answer to D and E. I have included the correct answers for A B and C Problem 8-41 (LO. 2, 3, 9) Lori, who is single, purchased 5-year class property for $200,000 and 7-year class property for $400,000 on May 20, 2016. Lori expects the taxable income derived from her business (without regard to the amount expensed under § 179) to be about $800,000. Lori wants to elect immediate...

The demand for ice cream is given by Q D = 20 – 2P, measured in...

The demand for ice cream is given by Q D = 20 – 2P, measured in gallons of ice cream. The supply of ice cream is given by Q S = 4P – 10. Suppose that the government legislates a $1 tax on a gallon of ice cream, to be collected from the seller. a) As a result of the tax, what is the price paid by buyers? b) What is the price received by sellers? Hint: You need to...

The market demand function for a good is given by Q = D(p) = 800 −...

The market demand function for a good is given by Q = D(p) = 800 − 50p. For each firm that produces the good the total cost function is TC(Q) = 4Q+( Q2/2) . Recall that this means that the marginal cost is MC(Q) = 4 + Q. Assume that firms are price takers. In the short run (with 100 firms), and assume that the government imposes a tax of $3 per unit. (a) What would be the new equilibrium...

Only need answers for e,f,g,h,i Jacob has the utility function for goods x and y asu(x,...

Only need answers for e,f,g,h,i Jacob has the utility function for goods x and y asu(x, y) = ?2/3?2/3. The price of good x is $2 each, and the price of good y is $5 each. Jacob has a total income of $120 to spend on these two goods. (a) Write down Jacob's budget line, and show in the graph. (b) Write down the budget exhaustion condition (BC) of Jacob’s optimization problem.(c) Write down the rationality condition (RC) of Mr....

Subjects