A firm is facing a downward sloping demand curve Q = 4/P and its unit cost of production is AC = 2Q. (a) Find the firm’s profit-maximising output and price. (b) Find the maximum level of profit the firm could obtain. (c) Find what would happened if the government forced the price to must not be more than P = 4?
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- Advertising could lead to lower prices a. if the advertising focusses on making demand as inelastic as possible b. if economies of scale achieved from more output exceed the advertising cost. c. if the advertising shifts the demand curve to the left. d. if the advertising intensity is low. e. under no circumstances, since the advertising costs money.Maximizing total revenue is the same as maximizing profit is this true or falseThe cost per unit of producing a product is 280 + 0.2x dollars, where x represents the number of units produced per week. If the equilibrium price determined by a competitive market is $420, how many units should the firm produce and sell each week to maximize its profit? units
- A firm's supply curve is upsloping because: the expansion of production necessitates the use of qualitatively inferior inputs. mass production economies are associated with larger levels of output. consumers envision a positive relationship between price and quality. beyond some point the production costs of additional units of output will rise.Question 6 options: The price of a product in a competitive market is $100. The cost per unit of producing the product is c=50+.1x, where x is the number of units produced each month. Find a) The monthly revenue R(x) b) The monthly cost function C(x) c) The monthly profit function P(x) d) Find x such that profit is maximized, and find the maximum profitThere are 38 nearly identical ABC stores within a one-mile radius in Waikiki. The combined size of these 38 stores allows ABC to offer large quantities at favorable prices. a. ABC gained market power through a.economies of scale b.government protection c.control of an important input . b. ABC’s market power a.does b.does not guarantee that the firm makes an economic profit.
- The demand function for x is D(p) = 65 - 2p and the supply function is S(p) = 20 + p. What is the price that should be set to restrict the quantity supplied to 30 units?When a store cannot get an item due to a lack of supply, it can offer the customer a few options. Which of the following is not an option that stores should offer customers when supply is low? The store can contact the customer when the item is back in stock. The store can pay to have the item shipped directly to the customer from the producer. The store can offer the item for free when the supply is restored. The store can apologize for not having the item and lose the sale.The method of production that largely determines the capability of suppliers to make products available is terms as the non-price determinant of supply as technology. costs of inputs. expectations of future prices. legal factors and considerations.
- Demand for an item is constant at 40 units a week, and the economic order quantity is calculated to be 100 units. What is the reorder level if lead time is constant at 4 weeks? What is the effect of adding some margin of safety and raising the reorder level by ten units? What happens if the lead time (a) falls to 2 weeks or (b) rises to 6 weeks?Supply is said to be inelastic when the quantity supplied changes* more than the change in its price. less than the change in it price. 2 equal to the change in its price. none of the above. Elasticity of supply tends to be greater when* inputs are specialized. time period allowed for adjustment is fairly long. degree of advertising is great. demand for the product is inelastic The supply curve overtime is more elastic than the supply curve over the short period of time because, given sufficient time* production techniques become more expensive. new firms can enter the industry and old firms can increase their plant size. producers become more competitive. consumers become more demanding.a. what is the optimal quantity of goods for the firm to produce b. what is the optimal price for the quantity of goods for the firm to produce c. what is the total revenue for the firm d. what is the total cost for the firm e. what is profit/loss for the firm