Suppose that you can sell as much of a product (in integer units) as you like at $74 per unit. Your marginal cost (MC) for producing the qth unit is given by: MC=8q This means that each unit costs more to produce than the previous one (e.g., the first unit costs 8*1, the second unit (by itself) costs 8*2, etc.). 1. If fixed costs are $450, what is the optimal integer output level? 2. If fixed costs are $450, what is the profit at the optimal integer output level? 3. If fixed costs are $525, what is the optimal integer output level? 4. If fixed costs are $525, what is the profit at the optimal integer output level?
Suppose that you can sell as much of a product (in integer units) as you like at $74 per unit. Your marginal cost (MC) for producing the qth unit is given by: MC=8q This means that each unit costs more to produce than the previous one (e.g., the first unit costs 8*1, the second unit (by itself) costs 8*2, etc.). 1. If fixed costs are $450, what is the optimal integer output level? 2. If fixed costs are $450, what is the profit at the optimal integer output level? 3. If fixed costs are $525, what is the optimal integer output level? 4. If fixed costs are $525, what is the profit at the optimal integer output level?
Chapter6: Proudction Costs
Section: Chapter Questions
Problem 8SQ
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Suppose that you can sell as much of a product (in integer units) as you like at $74 per unit. Your marginal cost (MC) for producing the qth unit is given by: MC=8q This means that each unit costs more to produce than the previous one (e.g., the first unit costs 8*1, the second unit (by itself) costs 8*2, etc.).
1. If fixed costs are $450, what is the optimal integer output level?
2. If fixed costs are $450, what is the profit at the optimal integer output level?
3. If fixed costs are $525, what is the optimal integer output level?
4. If fixed costs are $525, what is the profit at the optimal integer output level?
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