Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Question
Chapter B, Problem 2E
To determine
To evaluate the total, marginal and average profit functions from the table given in the previous question
To determine
To evaluate theplotting of the total profit and marginal profit functions in a single graph.
To determine
To evaluate thatif the policies described in part (a) and part (b) are likely to be successful
To determine
To evaluate thatif the policies described in part (a) and part (b) are likely to be successful
To determine
To evaluate the total profit at the profit maximizing output level
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Suppose a company has fixed costs of $53,200 and variable cost per unit of 1/3x + 444 dollars,
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(a) Find the break-even points. (Enter your answers as a comma-separated list.)
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Suppose the situation changes. JointJuice has its plant in Portland Oregon. The local government passes a new tax on businesses that raises JointJuice’s fixed cost by $25 per period. The cost function now becomes:
C(q) = 300 + 6q + 0.1q^2
All the other firms in the market are in other states/cities that are not subject to the laws or taxes of Portland.
Calculate JointJuice’s optimal output level and profits if the market price for the product stays the same as for part a. What will the firm do in the long run?
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Beta Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Beta hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is C = 20 + 2Q^2.
a. What are the firm's fixed costs?
b. What is the firm's marginal cost?
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d. What is the optimal level of output to maximize profits?
e. How much profit will be earned?
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Chapter B Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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