Suppose R(q) = 4q − q2 is a function that describes the revenue an individual can earn. Obviously, revenue depends on quantity q. Further suppose that C(q) is a function that describes the cost associated with q. (a) Consider a private ownership scenario where the individual can maximize profits. Compute the optimal level of q. (b) Now consider a scenario where the individual is unable to maximize profits due a lack of private ownership. In fact, nothing is private and all resources are public and shared by all. Compute the appropriate level of q the individual chooses now. (c) Graph your solution from (a) and (b)
Suppose R(q) = 4q − q2 is a function that describes the revenue an individual can earn. Obviously, revenue depends on quantity q. Further suppose that C(q) is a function that describes the cost associated with q. (a) Consider a private ownership scenario where the individual can maximize profits. Compute the optimal level of q. (b) Now consider a scenario where the individual is unable to maximize profits due a lack of private ownership. In fact, nothing is private and all resources are public and shared by all. Compute the appropriate level of q the individual chooses now. (c) Graph your solution from (a) and (b)
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section: Chapter Questions
Problem 17SQ
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Suppose R(q) = 4q − q2 is a function that describes the revenue an individual can earn. Obviously, revenue depends on quantity q. Further suppose that C(q) is a function that describes the cost associated with q.
(a) Consider a private ownership scenario where the individual can maximize profits. Compute the optimal level of q.
(b) Now consider a scenario where the individual is unable to maximize profits due a lack of private ownership. In fact, nothing is private and all resources are public and shared by all. Compute the appropriate level of q the individual chooses now.
(c) Graph your solution from (a) and (b)
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