Assume that the short-run total cost function of an entrepreneur is C = q³-10q² + 17q+66. If p = 5, identify the output level where he makes the most money. Calculate the cost-to-output elasticity at this output.

Assume that the short-run total cost function of an entrepreneur is C = q³-10q² + 17q+66. If p = 5, identify the output level where he makes the most money. Calculate the cost-to-output elasticity at this output.

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

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Accounting and Economic Profit analysis

One comes across the concept of Profits in the context of business and in analyzing the results of business activity. Profits of a business can be accounting profits, and they can also be economic profits. So how does one understand the concept of accounting versus economic profits?

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Assume that the short-run total cost function of an entrepreneur is C = q³-10q² +
17q+ 66. If p = 5, identify the output level where he makes the most money.
Calculate the cost-to-output elasticity at this output.

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