A firm has the following information on production and costs from past data: Output (Y) 0 6 12 18 Total Cost (TC) 9 2775 5361 8199 If the total cost function is known to be TC=aY' + bY2 +kY + f , and the demand for the product of the firm is Y=32041/2)4, answer the following: Determine the coefficients of the cubic cost function. Derive all cost and revenue curves and the profit Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all Calculate the break even and profit maximizing levels of output and price. What is the relationship between price, marginal revenue and own price elasticity of demand at the profit maximization point.
A firm has the following information on production and costs from past data: Output (Y) 0 6 12 18 Total Cost (TC) 9 2775 5361 8199 If the total cost function is known to be TC=aY' + bY2 +kY + f , and the demand for the product of the firm is Y=32041/2)4, answer the following: Determine the coefficients of the cubic cost function. Derive all cost and revenue curves and the profit Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all Calculate the break even and profit maximizing levels of output and price. What is the relationship between price, marginal revenue and own price elasticity of demand at the profit maximization point.
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter7: Production Economics
Section: Chapter Questions
Problem 6E
Related questions
Question
A firm has the following information on production
and costs from past data:
|
Output (Y) |
0 |
6 |
12 |
18 |
|
Total Cost (TC) |
9 |
2775 |
5361 |
8199 |
If the total cost function is known to be TC=aY' + bY2 +kY + f , and the demand for the product of the firm is Y=32041/2)4, answer the following:
- Determine the coefficients of the cubic cost function.
- Derive all cost and revenue
curves and the profit - Show that the MC cuts the
AVC when AVC is at its minimum point. Plot the relevant graph indicating all - Calculate the break even and profit maximizing levels of output and price.
- What is the relationship between price, marginal revenue and own
price elasticity of demand at the profit maximization point.
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