What output level should the firm produce to maximize profits and what are the profits at this output level? b) What output level should the firm produce to maximize revenue and what are the profits at this revenue maximizing output level c) Suppose the firm wishes to maximize revenues subject to the constraint that it earns KShs.12 in profits for each of the 64 machines it employs, what level of output should it produce?
What output level should the firm produce to maximize profits and what are the profits at this output level? b) What output level should the firm produce to maximize revenue and what are the profits at this revenue maximizing output level c) Suppose the firm wishes to maximize revenues subject to the constraint that it earns KShs.12 in profits for each of the 64 machines it employs, what level of output should it produce?
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter6: Demand And Elasticity
Section: Chapter Questions
Problem 6DQ
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3. A firm faces a demand curve given by the function: Q = 100 – 2P
Marginal and average costs for the firm are constant at KShs.10 per unit.
a) What output level should the firm produce to maximize profits and what are the profits at this output level?
b) What output level should the firm produce to maximize revenue and what are the profits at this revenue maximizing output level
c) Suppose the firm wishes to maximize revenues subject to the constraint that it earns KShs.12 in profits for each of the 64 machines it employs, what level of output should it produce?
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