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13 Dec 2018
NUMBER 1.
a. A firm is currently producing 40 units of output. At this level of ouput produced:
. Its average total cost is 130 (ATC = 130)
. The price per unit of output is 150
. MR = 30
. MC = 50
i. Is this firm making profits or losses? How much?
ii. Are they máximum profits? Why?
iii. If your answer to part ii. was no, what does this firm have to do to maximize its profits?
NUMBER 2.
A firmâs total cost and marginal cost functions are
TC = 10 Q2 + 2 Q â 2 ; MC = 20 Q + 2.
Asuming that the market price is 42 and that the marginal revenue (MR) is also 42 (it is constant at all output levels), how much output will this firm sell (produce) to maximize profits?
NUMBER 1.
a. A firm is currently producing 40 units of output. At this level of ouput produced:
. Its average total cost is 130 (ATC = 130)
. The price per unit of output is 150
. MR = 30
. MC = 50
i. Is this firm making profits or losses? How much?
ii. Are they máximum profits? Why?
iii. If your answer to part ii. was no, what does this firm have to do to maximize its profits?
NUMBER 2.
A firmâs total cost and marginal cost functions are
TC = 10 Q2 + 2 Q â 2 ; MC = 20 Q + 2.
Asuming that the market price is 42 and that the marginal revenue (MR) is also 42 (it is constant at all output levels), how much output will this firm sell (produce) to maximize profits?
Deanna HettingerLv2
14 Dec 2018
