Cost function-expected market price

Assignment Help Microeconomics
Reference no: EM1371295

You own a small firm that manufactures and sells a standardized product in a marketplace that closely resembles perfect competition. You have estimated your total cost function at C(Q) = Q + 3Q2, and your marginal cost function as MC = 1 + 6Q. In trying to plan for the upcoming year, you estimate there is a 75 percent chance the market price will be $100 and a 25% chance it will be $120.

- Compute the expected market price. Show calculations please.

- How many units should you produce to maximize expected profits?

- What is your expected profit or loss? Again, show work.

Reference no: EM1371295

Questions Cloud

Illustrate what would be effect of policy described : Illustrate what would be effect of policy described in part (c) on economy's stability over business cycle.
Create bean jsp program which will compute simple interest : Create the bean which will compute Simple Interest. Use bean in JSP program. Accept details of saving like principal amount, rate of interest, period-in years from user and show amount
Difference between product and process layout : What is the difference between product layout and process layout and how would product layout and process layout apply to a cookie company
Explain how will this trade affect incomes of capital owners : Explain how will this trade affect incomes of capital owners and workers in wool industry in Australia. Apply your knowledge of an appropriate framework to illustrate this.
Cost function-expected market price : Compute the expected market price. Show calculations please. How many units should you produce to maximize expected profits? What is your expected profit or loss? Again, show work.
Discuss pros and cons of forced population control : Some people have suggested that forced population control is an efficient means of decreasing the Tragedy of Commons associated with our clean air and water resources.
What is the smallest separation distance : A charge of -6 nC is at the origin and a second charge of 11.0 nC is at x = 5.0m. Find the magnitude and direction of an electric field halfway in between the two charges.
Illustrate what is equilibrium price of box : Illustrate what is equilibrium price of box. Is this long-run equilibrium price. Explain how many firms are in this industry when it is in long-run equilibrium.
When and how should a company train its employees : Does the size of the company affect the recommended training and would you train only new hires, or conduct regular, on-going training?

Reviews

Write a Review

 

Microeconomics Questions & Answers

  Computing average product cost

Burger Doodle is the fast-food restaurant that processes average of 680 food orders each day. Evaluate the average product cost

  Computing breakeven point and profits

The fixed costs at Harley Motors are $1 million annually. The main product has revenue of $8.50 per unit and $4.25 variable cost. Find out the following.

  Income-elasticity of demand coefficient

Use the arc-approximation formula to calculate the price-elasticity of demand coefficient of a firm's product demand between the (quantity,price) points of (50, $10) and (54, $8).

  Determining marketing mix

Marketing mix is controllable set of activities that the firm employs to respond to the wants of its target markets. Make a report on the marketing mix and keep the following questions in mind:

  Equilibrium price-physiotherapy

The equilibrium price for physiotherapy visits is $30 and the quantity utilized is 150 visits as a result of the demand and supply conditions in this diagram.

  Connection between demand for goods and market failures

What is significant about the connection between the demand for goods and market failures? What happens to the demand for goods when a market fails

  Description of pricing strategy

Determine your optimal pricing strategy if you and your rival believe that the new Jeep is a "special edition" that will be sold only for one year. Would your answer differ if you and your rival were required to resubmit price quotes year after ye..

  Equilibrium price-quantity-consumer surplus

Assume that the demand curve for apples is given by Qd = 140 - 5P, where Qd is number of pounds demanded per year and p is the price per pound. The supply of apples can be described by Qs = 40 + 3P, where Qs is the number of pounds provided.

  Effect of the ua increasing sovereign wealth funds on gdp

What is the effect of the United Arab Emirates' increasing sovereign wealth funds on GDP?

  What is the marginal rate of transformation

What is the Marginal Rate of Transformation between sugar and tea?

  Market dominance

Please explain why international strategy is important. What is the difference between domestic and international strategic planning?

  Description of monopolistic competition

A restaurant industry has a market structure that comes closest to

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd