The Berber Corporation's total cost function is 200 9Q + 3Q2 TC MC 9+6Q where TC is the total cost in dollars, Q is quantity, MC is marginal cost per additional unit and P is product price Which rule should Burr Corp use to select a level of output that will maximize profit? If the firm sells its product in a perfectly competitive market and the current market price for its product is $81, what is its optimal output rate (Q)? At this level of output what is its expected profit (n)?

The Berber Corporation's total cost function is 200 9Q + 3Q2 TC MC 9+6Q where TC is the total cost in dollars, Q is quantity, MC is marginal cost per additional unit and P is product price Which rule should Burr Corp use to select a level of output that will maximize profit? If the firm sells its product in a perfectly competitive market and the current market price for its product is $81, what is its optimal output rate (Q)? At this level of output what is its expected profit (n)?

Microeconomics: Private and Public Choice (MindTap Course List)

16th Edition

ISBN:9781305506893

Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

Chapter9: Price Takers And The Competitive Process

Section: Chapter Questions

Problem 15CQ

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Question                                                                                                 Road Runner Co is a Pakistani manufacturer making Bicycles. It exports to two markets,Bangladesh and Sri Lanka. Demand for Bicycles in thesetwo markets is given by the following Functions: Bangladesh                 Q1 = 12 – P1 Sri Lanka                     Q2 =   8 – P2 Where Q1 and Q2 are respective quantities sold (in thousands) andP1 and P2 are the respective prices (in Pak. Rupees per unit) in the two markets. Total cost function is C = 5 + 2 (Q1+ Q2) Now consider two cases (i) Company is effectively able to price discriminate in the two markets. What will be the total profits? (ii) Suppose the company does not engage in price discrimination. By charging the same price in the two markets what are the profit maximizing levels of price, output, and the total profits?                                          c. Analyze, with graphs, the two alternative pricing strategies…
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