Suppose that, at a quantity of q = 20, a firm's costs are as follows: MC = 20, AVC = 12, ATC = 30. Then The minimum of the AVC occurs at a quantity less than q = 20 The minimum of the AVC occurs at a quantity greater than q = 20 The minimum of the AVC occurs at a quantity of a 20
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- ) A company manufacturing laundry sinks has fixed costs of $100 per day but has totalcosts of $2,500 per day when producing 15 sinks. The company has a daily demand functionof q = 360 − p, where q is the number if laundry sinks demanded and p is te price ofa laundry sink. Find a function for the average cost of this company. (c) If production increases continuously, what is likely to be the average cost per sink? (d) How many laundry sinks will the company need to produce in order to maximise it′s profits? (e) What is the maximum profit?A firm has a linear demand function for its product. When the price of the product isSh.220, the quantity demanded is 40 units. When the price increases to Sh.240, thequantity demanded becomes 30 units. In addition, the firm’s marginal cost function isgiven by:MC = 40q – 2q2 + 2Fixed cost = Sh.5 millionWhere q = quantity demanded, MC = marginal cost (Sh. million)Evaluate the level of output that maximizes profits.Suppose that a firm has increasing marginal cost, and a positive fixed cost. What happens to minimum effcient scale if the xed cost increases
- Y6 questions1. A firm produces TVs and ovens witha joint cost function that takes the form:C(x,y) = 3x^2 + 2y^2 + 2xy where x and y are the firm's output of TVs and ovensrespectively. Suppose the cost function is subject to the constraint on the total output ofthe firm in the form 2x + y = 35.a) Find the optimum values x and that minimize the firm's total cost.b) Check your answer in (a) by using the bordered Hessian matrix.c)Determine the optimum value of the Lagrange multiblier À. Interpret your answer.A firm has the production function F(L, K) = L^1/2 + K^1/2The price of labor is $10 and the price of capital is $15. The firm has a production goal of Q = 100 units ofoutput.a) Neatly specify this firm’s cost minimization problem, using the particulars associated with this problem.b) Give two equations that an interior solution satisfies, tailoring your equations to the particulars of thisproblem.c) Solve the two equations for the firm’s optimal choice. Show your work.A company manufacturing laundry sinks has fixed costs of $100 per day but has totalcosts of $2,500 per day when producing 15 sinks. The company has a daily demand functionof q = 360 − p, where q is the number if laundry sinks demanded and p is te price ofa laundry sink. ) If production increases continuously, what is likely to be the average cost per sink? How many laundry sinks will the company need to produce in order to maximise it′s profits? What is the maximum profit?
- Revenue and Cost The total weekly revenue functionfor a certain digital camera is given by R = 550xdollars, and the total weekly cost function for thecameras is C = 10,000 + 30x + x2dollars, where xis the number of cameras that are produced and sold.a. Find the profit function.b. Find the number of cameras that gives maximumprofit.c. Find the maximum possible profit.How to calculate Samsung's cost (C(Q)) of producing 1, 2,...15?Q.No.3. Consider the production function: (3) Y = 0.75X + 0.0042X2 – 0.000023X3 (a) At what level of X, the output will be maximum? (b) If input price is 0.15$ and output price is 4$ then at what level of X, profit will be maximum?
- For a firm with a Total Cost function TC C(Q), recall that the definitions of Marginal Cost (MC) and AverageTotal Cost (ATC) are given as follows:Marginal Cost (MC) = C'(0)Average Total Cost (ATC) = C(Q)/QProve that the marginal cost is equal to the average total cost (MC = ATC) when the average total cost is at itsminimum value.(Hint: By using the definition of average cost function, find the quantity that minimizes it by applying unconstraint optimization.Show that the FOC of the minimization problem implies that MC=ATC has to be satisfied at the minimum level of average cost.)for a firm with price in excess of average total cost, the presence of ecomonics profits implies that the firm should increase output in the short runeven if the price is below marginal cost . true or false explaincompany manufacturing laundry sinks has fixed costs of $100 per day but has totalcosts of $2,500 per day when producing 15 sinks. The company has a daily demand functionof q = 360 − p, where q is the number if laundry sinks demanded and p is te price ofa laundry sink.(a) If we assume that the total cost per day is linearly related to the amount of sinksproduced in a day, derive the total cost function of the company?(b) Find a function for the average cost of this company.(c) If production increases continuously, what is likely to be the average cost per sink?(d) How many laundry sinks will the company need to produce in order to maximise it′s profits?(e) What is the maximum profit?
