MICROECONOMICS(LL)
21st Edition
ISBN: 9781260279085
Author: McConnell
Publisher: MCG
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Chapter 10.6, Problem 2QQ
To determine
Changes in output when price changes.
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You are the manager of a bakery that produces and packages bran buns. According to the new research, a typical consumer's inverse demand function for your bran buns is P = 4-0.5Q . Your cost of producing bran buns is C (Q) = 1Q .
a) Determine the optimal number of bran buns to sell in a single package and the optimum package price. Find profits you earn.
b) Suppose your company sells buns charging per-unit price. Find the profit-maximizing price.
c) Compare profits your company would earn using the strategy of one price (b) with profits generated in (a).
Dalahla Company Limited, focusing on producing tooth paste (in units) has a demand function4? = 35 − 0.5?. If total fixed cost is GH¢80 and average variable cost per unit function is 3? −51+325/Q, where Q is number of tooth paste produced and P is the price per tooth paste (in GH¢).What is the total profit at the profit maximizing level of output, and what is the best pricing policyoption?
Suppose a firm operating in a competitive market has cost curves according to the above figure. Which of the following prices is the shutdown price?
P1
P2
P3
P4
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Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
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