Study Guide for Microeconomics
9th Edition
ISBN: 9780134741123
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 4E
(a)
To determine
The level of production,
(b)
To determine
The level of production, price, and profit per week of the firm with tax.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Q1. A firm faces the following average revenue (demand) curve: P = 100 - 0.01Q where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 50Q + 30,000. Assuming the firm maximizes profits, a. What is the level of production?
The price-demand equation for the production of bluetooth speakers is: p = 250 - 1/20x, for 0 is less than or equal to x and x is less than or equal to 5000 where x speakers can be sold at $p per each speaker. The cost to produce x speakers is given as C(x) = 150,000 + 30x, where both C(x) and p are represented in dollars ($).
- find the profit function and the marginal profit and interpret the quantity P'(4500)
- find the marginal cost and interpret the quantity C'(3000)
- find the revenue function and the marginal revenue and interpret the quantity R'(3000)
A firm has marginal revenue MR(x)=3x and marginal cost AC(x)=1/3x^2 Find the profit obtained by the firm for production level between the starting point and the point when MC(x)=MR(x)
Chapter 10 Solutions
Study Guide for Microeconomics
Ch. 10 - Prob. 1RQCh. 10 - Prob. 2RQCh. 10 - Prob. 3RQCh. 10 - Prob. 4RQCh. 10 - Prob. 5RQCh. 10 - Prob. 6RQCh. 10 - Prob. 7RQCh. 10 - Prob. 8RQCh. 10 - Prob. 9RQCh. 10 - Prob. 10RQ
Ch. 10 - Prob. 11RQCh. 10 - Prob. 12RQCh. 10 - Prob. 13RQCh. 10 - Prob. 14RQCh. 10 - Prob. 1ECh. 10 - Prob. 2ECh. 10 - Prob. 3ECh. 10 - Prob. 4ECh. 10 - Prob. 5ECh. 10 - Prob. 6ECh. 10 - Prob. 7ECh. 10 - Prob. 8ECh. 10 - Prob. 9ECh. 10 - Prob. 10ECh. 10 - Prob. 11ECh. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 17ECh. 10 - Prob. 19E
Knowledge Booster
Similar questions
- Suppose that the development of a new drought-resistant hybrid seed corn leads to a 50 percent increase in the average yield per acre without increasing the cost to the farmers who use the new technology. If the producers in the corn production industry were price takers, what would happen to the following? a. the price of corn b. the profitability of corn farmers who quickly adopt the new technology c. the profitability of corn farmers who are slow to adopt the new technology d. the price of soybeans, a substitute product for cornarrow_forwardQuestion 1a A firm faces the following average revenue (demand) curve: P(Q) = 240 - 0.04 Q where Q is the weekly production and P(Q) is the price, measured in cents per unit. The firm's cost function is given by TC(Q)=120Q+50000. Assume that the firm maximises profit. i) What is the profit maximization quantity and price. ii) What is the total profit per week?arrow_forwardAssume that a firm’s marginal revenue curve intersects the rising portion of its marginal cost curve at 500 units of output. At this output level, a profit-maximizing firm’s total cost of production is $1,000. If the price of the product is $5 per unit, the total revenue earned by the firm will be:arrow_forward
- The total revenue curve of a firm is R(q) = 40q − 12q2 and its average cost A(q) = 1/30 q2 − 12.85q + 20 + 400/q , ,where q is the firm's output. Is the rate of change of profit increasing or decreasing when the output level of the firm is 10 units?arrow_forwardGiven Cost and Price (demand) functions C(q)=120q+45000 and p(q)=−2.8q+900, what is the marginal revenue when costs are $80,000? The marginal revenue is ____dollars per item.arrow_forwardIf the demand for a particular commodity is p=-0.09x+51 the total cost function, C(x)=1.32x^2+11.7x+101.4 where x is the level of production. Find the 1. Revenue, R(x) 2. Profit, S(x) 3. All the values of x for the production of the commodity are profitable.arrow_forward
- Assume a firm's supply function for a good is given by the following expression: qs (p) = p−10 a.) where p represents the price of the good (in dollars) and qs (p) is the quantity supplied at that price. Suppose the price of the good is initially $30. If the price decreases by 1%, What is the effect on the firms total revenue?arrow_forwardA firm faces the following average revenue (demand) curve: P = 100 - 0.01Q. where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C = 5Q +2000. Assuming the firm maximizes profits production, determine the price and total profitper week.arrow_forward(i) If the demand function for a particular commodity is p=−0.09x+51 and the total cost function C(x)=1.32x2+11.7x+101.4,where x is the level of production. Find (a) The revenue R(x) and profit Π(x). (b) All values of x for which production of the commodity is profitable. (ii) The total cost of manufacturing x units during the daily production run at a factory,is C(x)= x2+ x+900 dollars. Usually,x(t)=25t units are manufactured during the first t hours of production. (a) Express the total manufacturing cost as a function of t. (b) How much will have been spent on production by the end of the third hour? (c) When will the total manufacturing cost reach $11,000?arrow_forward
- A firm's demand and total cost function are given by the expression: P = 20 - Q/2 (1) TC = 0.5Q2 + 36 (2) Where P is price per unit in £ TC = total cost in £ Q is quantity demanded and produced. Find the profit-maximising level of output using the profit function and calculate how much profit is made at this output level.arrow_forwardThe demand function for a firm is; Qd = 122,000 - 500P + 4M +10,000PR where, Qd is quantity demanded, P is price per unit. M is income, and PR the price of a related good. The estimated the valueS of M and PR will be Rs 3200 and Rs 4, respectively. The firm's estimated average variable coSt function IS; AVC = 500 - 0.03Q + 0.000001Q2 a. Find the profit maximizing level of output of the firm and the price to charge. b. Should the manager continue production or shut down? Explain your answer. c. Find the level of output at which the average variable cost is at its minimum.arrow_forwardConsider a competitive firm with a short-run cost function C(q) = 100q−q2 + 1/5q3 +450. (a) Suppose that the market price is $205. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why? (b) Suppose that the market price is $105. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why? (c) Suppose that the market price is $205 and there is a tax of $65 per unit produced. Find the optimal output. Find the profit or loss at the optimal output. Will the firm stay or shutdown? Why?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage LearningEconomics: Private and Public Choice (MindTap Cou...EconomicsISBN:9781305506725Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage LearningMicroeconomics: Private and Public Choice (MindTa...EconomicsISBN:9781305506893Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. MacphersonPublisher:Cengage Learning
- Microeconomics: Principles & PolicyEconomicsISBN:9781337794992Author:William J. Baumol, Alan S. Blinder, John L. SolowPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Economics: Private and Public Choice (MindTap Cou...
Economics
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Private and Public Choice (MindTa...
Economics
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:Cengage Learning
Microeconomics: Principles & Policy
Economics
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:Cengage Learning