Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given byC 100+2qwhere q is the level of output and C is total cost. (The marginal cost of production, MC(g), is 4q; the fixed cost, FC, is $100).If the price of a watch is $80, how many watches should you produce to maximize profits?You should produce 20 watches. (Enter your response as an integer.)What will the profit level be?Profit will be $ 700 (Enter your response rounded to two decimal places.)At what minimum price will the firm produce a positive output?In the short run, the firm will produce if price is greater than $per watch. (Enter your response as an integer.)

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Asked Nov 21, 2019
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Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by
C 100+2q
where q is the level of output and C is total cost. (The marginal cost of production, MC(g), is 4q; the fixed cost, FC, is $100).
If the price of a watch is $80, how many watches should you produce to maximize profits?
You should produce 20 watches. (Enter your response as an integer.)
What will the profit level be?
Profit will be $ 700 (Enter your response rounded to two decimal places.)
At what minimum price will the firm produce a positive output?
In the short run, the firm will produce if price is greater than $per watch. (Enter your response as an integer.)
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Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by C 100+2q where q is the level of output and C is total cost. (The marginal cost of production, MC(g), is 4q; the fixed cost, FC, is $100). If the price of a watch is $80, how many watches should you produce to maximize profits? You should produce 20 watches. (Enter your response as an integer.) What will the profit level be? Profit will be $ 700 (Enter your response rounded to two decimal places.) At what minimum price will the firm produce a positive output? In the short run, the firm will produce if price is greater than $per watch. (Enter your response as an integer.)

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Expert Answer

Step 1

Given,

Cost of production C = 100 + 2q2

Where, q is the level of output.

Marginal cost = 4q

Fixed cost = $100

Variable cost = 2q2

A firm will produce in the short run if its revenue is greater than it...

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VC AVC= 24 = 2q

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