MICROECONOMICS W/CONNECT >IC<
20th Edition
ISBN: 9781259890031
Author: McConnell
Publisher: MCG
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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 W/CONNECT >IC<
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