Microeconomics with Connect Access Card
20th Edition
ISBN: 9781259278556
Author: Campbell McConnell
Publisher: McGraw-Hill Education
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Chapter 11.6, Problem 3QQ
To determine
Profit maximizing output.
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(MANAGERIAL ECONOMICS) Show algebraic solution please
Assume that B = -Q 2 + 4,500Q and C= 2Q 2 are the benefits and costs of increasing the units of X-brand energy drink (in a 500 ml bottle).A. What is the profit function of X-brand energy drink production?Ā B. What is the profit-maximizing value of Q? Solve the problem using a tabular solution, showing the Profit, MB, MC and MNB values; assume Q varies by 50 units (in 500 ml bottle). Highlight the profit maximizing level.
If an increase in output size results in reductions in average costs, this is known as:
Ā
Ā
Answers:
A.Ā
Economies of scale.
Ā
B.Ā
Half-way rule of marginal revenue.
Ā
C.Ā
Diminishing marginal returns.
Ā
D.Ā
Rising average total cost.
A firm's total revenues depend on the amount produced (q) according to the function R=240 q-q^(2) Total costs also depend on q:C=q^(2)+60 q+120 a) What level of output should the firm produce in order to maximize profits? What will profits be? b) Show that the second order conditions for a maximum are satisfied at the output level found in part b)
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Chapter 11 Solutions
Microeconomics with Connect Access Card
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- Which of the ff statements are true about cost function a. It estimate the total cost of production given a specific budget b. It helps predict what the marginal cost would be to produce a product at different levels of output c. It allows management to evaluate how efficiently the production process was at the beginning of the operation period d. It helps manager understand the price behavior of the product A firm profit maximization point is where a. Total revenue Is greater than total cost b. Marginal revenue is equal to marginal cost c. Marginal revenue is greater than total cost d. Marginal cost is less than total costarrow_forwardIf a firm operates in a demand-driven market, then it should expect to face: Ā a. Massive economies of scale. Ā b. All other options are correct. Ā c. Fast technological innovation. Ā d. Corporate customers.arrow_forwardplease sir please solve these questions Ā 29-an addition made to the TC or TVC as output is increased by one more units is called: A- AVC B- ATC C- MC D- AC 30- cost function are derived from : A- Supply function B- None of these C- Demand function D- Production function 31-MP for nth unit is equal to: A- TPn-TPn+1 B- APn-Apn-1 C- TPn-TPn-1 D- TPn-TPn-1arrow_forward
- Briley Cosmetics manufactures and distributes a wide range of skin care products. A recent order has arrived for 10,000 cartons of face cream, 5,000 cases of body cream, and 15,000 cases of hand cream. The manufacturing process consists of a two-stage procedure that uses two types of raw materials (A and B). Brileyās monthly production capacity (first shift) is 15,000 labor-hours for stage 1 and 10,000 for stage 2. The first shift hourly rates are $8.50 for stage 1 and $9.25 for stage 2. A second shift is available with a 10% reduction in capacity and a 10% increase in wage rates. The cost for raw materials is $1/pound for Type A and $1.50/pound for Type B. The manufacturing facility has available for the next production run 200,000 pounds of Type A and 150,000 pound of Type B. The following table summarizes the resource requirements to produce each product. Briley can also subcontract with a local supplier for face cream and body cream at a cost of $40/carton and $55/carton,ā¦arrow_forwardIf a firm's marginal revenue is below its marginal cost, an increase in production will usually: a. increase profits b. leave profits unchanged c. decrease profits d. increase marginal revenuearrow_forwardA multi plant firm has equated marginal costs at each plant. By doing this:a) profits are maximized b)costs are minimized given the level of output c)revenues are maximized given the level of output d) none of the abovearrow_forward
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