Question

5. What time is it now?! Watch Yourself, a firm that makes timepieces for the impatient, believes its profit function is given by π = 10−48Q +15Q^2 −Q^3 .

(a) Compute the firm’s profit for output levels of 2, 8, and 14.

(b) Derive an equation for marginal profit. Compute marginal profit at output levels of 2, 8, and 14. At what output is profit maximized?

(c) Verify the profit-maximizing solution using calculus

Answer #1

Question 3A. (5 Point) CLO3
The demand equation for a product sold by a competitive firm in
UAE is given by the following equation and firms sell their product
at 100 AED:
Q = 500 – 10P
The total cost equation of the firm is given by the following
equation:
TC = 80 + 20Q +
0.2Q2
Derive the inverse demand function. (1
Point)
What is the firm’s MC function? (1/2
Point)
What is the firm’s MR function? (1/2
Point)...

Consider the following total cost function for an individual
firm:
C(q) = 10+ q + (1/4)q^2
The industry demand is estimated to be:
Q = 100 - P
1) Now suppose there is a monopolist facing the industry demand.
Write down the monopolist's pro t function.
2) What is the equation of the monopolists marginal revenue
function? Also, explain how the monopolist's marginal revenue
function differs from the marginal revenue function of a firm in a
long-run perfectly competitive market....

1. Assume that a competitive firm has the total cost function:
TC=1q3−40q2+840q+1800TC=1q3-40q2+840q+1800 Suppose the price of the
firm's output (sold in integer units) is $750 per unit. Using
calculus and formulas to find a solution (don't just build a table
in a spreadsheet as in the previous lesson), what is the total
profit at the optimal integer output level? Please specify your
answer as an integer. Hint 1: The first derivative of the total
cost function, which is cumulative, is...

Suppose a competitive firm has as its total cost function:
TC=29+2q2 Suppose the firm's output can be sold (in integer units)
at $77 per unit. Using calculus and formulas (don't just build a
table in a spreadsheet as in the previous lesson), what is the
total profit at the optimal integer output level?
Please specify your answer as an integer. In the case of equal
profit from rounding up and down for a non-integer initial solution
quantity, proceed with the...

1. Suppose a short-run production function is described as Q =
30L - 0.05L^2 where L is the number of labors used each hour.
a. Derive the equation for Marginal Product of Labor
b. Determine how much output will the 200th worker
contribute:
c. Determine the amount of labor (L) where output (Q) is
maximized (known as Lmax):
d. If each unit of output (Q) has a marginal revenue (price) of
$5 and the marginal cost of labor is $40...

Question 4 Consider the following game. Firm 1, the leader,
selects an output, q1, after which firm 2, the follower, observes
the choice of q1 and then selects its own output, q2. The resulting
price is one satisfying the industry demand curve P = 200 - q1 -
q2. Both firms have zero fixed costs and a constant marginal cost
of $60. a. Derive the equation for the follower firm’s best
response function. Draw this equation on a diagram with...

Question 1
If you are trying to make yourself as happy as you can be given
the constraints that you face, you are effectively:
Select one:
a. trying to find the intersection point between two budget
constraints.
b. trying to find the point on the budget constraint that is on
the highest indifference curve.
c. trying to find the point where the budget constraint and an
indifference curve intersect.
d. trying to find the point on an indifference curve that...

A firm will continue to operate in the long run only if:
Selected Answer: it earns a nonnegative economic profit.
Question 2 Correct A profit-maximizing firm should shut down in
the short run if: Selected Answer: total revenue is less than total
variable cost.
Question 3 Correct A firm’s long-run average cost curve is
estimated by the equation: LAC = 1,000 – 4Q + 0.012Q2. At what
quantity is the minimum efficient scale of production? Hint: Write
your answer to...

Which of the following statements is true about profit, revenue
and cost?
A.
In economics, π means “profit”.
B.
Profit equals to revenue minus cost.
C.
π = R – C
D.
All above are true.
0.4 points
QUESTION 2
The relationship between quantity of input and total quantity of
output is _____________
A.
Production function.
B.
Total cost function.
C.
Total revenue curve.
D.
Marginal production curve.
0.4 points
QUESTION 3
Which of the following statements is...

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