Suppose the inverse demand curve on ore is given by P = X - 0.47 Q. Ore can be either mined or obtained through a recycling program. The marginal cost of mining is MC1 = 8 q1. The marginal cost of obtaining ore through recycling is MC2 = 91 + 2 q2. What should be a maximum value of X so that recycling is NOT cost-effective?

Suppose the inverse demand curve on ore is given by P = X - 0.47 Q. Ore can be either mined or obtained through a recycling program. The marginal cost of mining is MC1 = 8 q1. The marginal cost of obtaining ore through recycling is MC2 = 91 + 2 q2. What should be a maximum value of X so that recycling is NOT cost-effective?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter10: Strategy: The Quest To Keep Profit From Eroding

Section: Chapter Questions

Problem 10MC

See similar textbooks

Similar questions

Suppose the inverse demand curve on ore is P = 95 - 0.19 Q. Ore can obtained through a recycling program, or mining. The marginal cost of mining is MC1 = 6 q1, while the marginal cost of obtaining ore through recycling is MC2 = 11 + 2 q2. What % of total demand is satisfied by recycled ore ?
A firm’s total cost C is given by the function: C = 4X2 Where X is the level of output and C is the cost. The firm can sell any number of units of output at a price of 64. However, production inflicts damage on the firm’s neighbours. The total damage D inflicted depends on the firm’s output: D = 4X + X2. Assume that the neighbours have the property rights: In the absence of an agreement between the firm and its neighbours, what would the level of output be? If an agreement between the firm and its neighbours is negotiated, what are the smallest and largest payments that the firm would have to make?
Suppose the inverse demand curve on ore is given by P = 72 - 0.44 Q. Ore can be either mined or obtained through a recycling program. The marginal cost of mining is MC1 = 6 q1. The marginal cost of obtaining ore through recycling is MC2 = 14 + 4 q2. What percent of total demand is satisfied by recycled ore (express your answer in percentage, i.e., if the answer is 45.34% then enter 45.34)? Please answer in short
An economist estimates the value of a nature preserve by calculating the price premium people pay for houses located adjacent to the preserve. This is an example of what type of economic valuation? a. Hedonic pricing b. Replacement cost methods c. Contingent valuation d. Travel cost models e. Defensive expenditures
For a certain company, the cost function for producing x items is C(x)=40x+150 and the revenue function for selling x items is R(x)=−0.5(x−90)^2+4,050. The maximum capacity of the company is 130 items. The profit function P(x) is the revenue function R(x) (how much it takes in) minus the cost function C(x) (how much it spends). In economic models, one typically assumes that a company wants to maximize its profit, or at least make a profit! 1. Assuming that the company sells all that it produces, what is the profit function? P(x)= 2. What is the domain of P(x)? 3. The company can choose to produce either 50 or 60 items. What is their profit for each case, and which level of production should they choose? 4. Can you explain, from our model, why the company makes less profit when producing 10 more units?
For a certain company, the cost function for producing x items is C(x)=30x+200 and the revenue function for selling x items is R(x)=−0.5(x−110)2+6,050. The maximum capacity of the company is 170 items. The profit function P(x) is the revenue function R(x) (how much it takes in) minus the cost function C(x) (how much it spends). In economic models, one typically assumes that a company wants to maximize its profit, or at least make a profit! 1. Assuming that the company sells all that it produces, what is the profit function? P(x)= ? 2. What is the domain of P(x)? 3. The company can choose to produce either 80 or 90 items. What is their profit for each case, and which level of production should they choose? Profit when producing 80 items=? Profit when producing 90 items=?
A firm’s total cost C is given by the function: C = 4X2 Where X is the level of output and C is the cost. The firm can sell any number of units of output at a price of 64. However, production inflicts damage on the firm’s neighbours. The total damage D inflicted depends on the firm’s output: D = 4X + X2 (a) Assume that the firm has the property rights: (i) In the absence of an agreement with its neighbours, what would its level of output be? (ii) Suppose that the neighbours negotiate with the firm. To what level of output would the negotiations lead? (iii) What is the minimum payment that the neighbours must make to the firm to achieve this change in output? (iv) What is the maximum payment that the neighbours must make to the firm to achieve this change in output? (b) Assume that the neighbours have the property rights: (i) In the absence of an agreement between the firm and its neighbours, what would the level of output be? (ii) If an agreement between the firm and…
Refer to the attached image to determine the price and quantity for the following questions below. allocative efficiency dynamic efficiency Pareto efficiency
A friend of yours is considering two cell phone service providers. Provider A charges $110 per month for the service regardless of the number of phone calls made. Provider B does not have a fixed service fee but instead charges $1 per minute for calls. Your friend's monthly demand for minutes of calling is given by the equation QD=100−20P, where P is the price of a minute. With Provider A, the cost of an extra minute is With Provider B, the cost of an extra minute is Given your friend's demand for minutes and the cost of an extra minute with each provider, if your friend used Provider A, he would talk for ___ minutes, and if he used Provider B, he would talk for ____ minutes. This means your friend would pay___ for service with Provider A and ____ for service with Provider B. Use the following graph to draw your friend's demand curve for minutes. Then use the green triangle to help you answer the questions that follow. Your friend would…
You and your friends love to go fishing. There is a sporting goods store in your neighborhood that sells a fishing pole for $82 but costs the store $60, and a fully stocked tackle box that sells for $58 but costs $40. Assuming the mark-up policy is linear, determine the equation that relates price (P) to cost (C). Following this same mark-up policy for other items, what would be the price of a pair of waders which cost the company $80?
A friend of yours is considering two cell phone service providers. Provider A charges $100 per month for the service regardless of the number of phone calls made. Provider B does not have a fixed service fee but instead charges $1 per minute for calls. Your friend's monthly demand for minutes of calling is given by the equation QD=120−30PQD=120−30P, where PP is the price of a minute. With Provider A, the cost of an extra minute is ? With Provider B, the cost of an extra minute is ? Given your friend's demand for minutes and the cost of an extra minute with each provider, if your friend used Provider A, he would talk for ?? minutes, and if he used Provider B, he would talk for ?? minutes This means your friend would pay for service with Provider A and for service with Provider B. Use the following graph to draw your friend's demand curve for minutes. Then use the green triangle to help you answer the questions that follow. Your friend would obtain in consumer surplus…
Exercise 4.6 An econometrician hired to analyse a local golf course has determined that there are two types of golfers, the regular and the occasional. The annual demand for games from regular players is given by QH = 24 – 0.3P, where P is the price of a round of golf. On the other hand, the annual demand for occasional items is given by QO = 10 – 0.1P. The marginal cost and the average total cost per item are equal to €20. a) If you could distinguish between regular and casual players, what price would be set for each type? How many games would each type of player play? How much profit could the golf course generate? Represent graphically. b) As an alternative to the discrimination of third degree prices, those in charge consider a double tranche rate according to which the members can play as many games as they wish at a price of € 20 per game. How much profit will the golf course generate if it charges all players the same annual fee for becoming a member of the club? What if you…