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- If a firm is a price taker, then its marginal revenue will always equal * a)price. b)zero. c)total cost. d)one."A profit maximizing firm seeks to produce at an output where its marginal revenue is equal to its marginal costs." Agree or disagree with this statement.Q1. A firm faces the following average revenue (demand) curve: P = 100 - 0.01Q where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 50Q + 30,000. Assuming the firm maximizes profits, a. What is the level of production?
- Many companies start with cost to determine price since revenue must cover cost for the firm to make a profit. True FalseQuestion 1a A firm faces the following average revenue (demand) curve: P(Q) = 240 - 0.04 Q where Q is the weekly production and P(Q) is the price, measured in cents per unit. The firm's cost function is given by TC(Q)=120Q+50000. Assume that the firm maximises profit. i) What is the profit maximization quantity and price. ii) What is the total profit per week?A firm has the following revenue and cost functions. TR = 120 Q – Q2 TC = Q2 +30 Q + 10 Determine the quantity level at which the firm maximizes its total profit. (Hint: use marginal revenue = marginal cost rule)
- Firms experience a break even point when a. Total revenue is greater than total cost b. Marginal cost os equal to marginal revenue c. Average fixed cost is equal to average variable cost d. Marginal revenue is zeroThe value of marginal revenue is $64 and the change in output is 5 units. Calculate the change in total revenueYour college newspaper, The Collegiate Investigator, sells for 90¢ per copy. The cost of producing x copies of an edition is given by C(x) = 70 + 0.10x + 0.001x2 dollars. (a) Calculate the marginal revenue R'(x) and profit P'(x) functions. HINT [See Example 2.] R'(x) = P'(x) = (b) Compute the revenue and profit, and also the marginal revenue and profit, if you have produced and sold 500 copies of the latest edition. revenue $ profit $ marginal revenue $ per additional copy marginal profit $ per additional copy Interpret the results. The approximate from the sale of the 501st copy is $ . (c) For which value of x is the marginal profit zero?x = copiesInterpret your answer. The graph of the profit function is a parabola with a vertex at x = , so the profit is at a maximum when you produce and sell copies.
- If a firm is producing at a quantity in which the marginal cost exceeds marginal revenue, the firm _____.The demand equation of a product is p=100/q+10. Find the marginal revenue when q=10.The value of Marginal revenue is $40 and the value of marginal cost is $30. Is the firm maximizing profits True/False