Question

QUESTION 12

1. A company produces masks. The market is highly competitive with each mask selling for $15. The firm's total cost curve is C=50,000+(1/10)q. What is the firm's profit maximizing quantity?

   		75
   		150
   		0
   		50

4 points   

QUESTION 13

1. An amusement park would like to charge its customers both an entrance fee and a price per ride. If the marginal cost per ride is $3, and each individual consumer’s demand is q = 12− P, what are the optimal the admission fee and price per ride?

   		entrance fee = $40.5; price per ride = $3.
   		entrance fee = $81; price per ride = $3.
   		entrance fee = $40.5; price per ride = $0.
   		entrance fee = $22; price per ride = $1.

4 points   

QUESTION 14

1. A legal office provides services to a wide variety of customers and charges a personalized price to each of them. Market’s demand is: P = 250 − 10Q. The firm’s marginal cost of service is: MC = 20Q. What would be the lowest price that it would charge?

   		50
   		250
   		10
   		20

Answer 1

Answer 12:

Quantity	Cost function C=50,000+(1/10)q	Revenue	Profit
75	50007.5	1125	-48882.5
150	50015	2250	-47765
0	50000	0	-50000
50	50005	750	-49255

As the potential output of the firm is not given the output at which the loss is minimum will be the correct answer.

In the above table loss is minimum at 150 units of output.

Therefore, the correct answer is option (B) 150

"As per the honor code, we answer only 1st question"

Please hit thumbs up, if you like the solution.