Find the firms profit maximizing price and quantity

Assignment Help Econometrics
Reference no: EM13213527

A firm uses a single plant with costs C=160+16Q+.1Q^2 and faces the price equation P=96-.4Q.

a) Find the firm's profit maximizing price and quantity. What is the profit?

b) The firm's production manager claims that the firm's average cost of production is minimized at an output of 40 units. Furthermore, she claims that 40 units is the firm's profit-maximizing level of output. Explain whether these claims are correct.

c.) Could the firm increase its profit by using a second plant (with costs identical to the first) to produce the output in part (a)? Explain.

Reference no: EM13213527

Questions Cloud

Analystical methods of production : What do you understand by the term analystical methods of production
Describe the process of inspiration and expiration : Describe the process of inspiration and expiration, please include skeletal muscle involve, the pressure gradient and the flow of air for both processes.
Explain when electrons move from the fourth energy level : when electrons move from the fourth energy level to the second energy level, they emit visible light. explain why the light emitted when an electron makes this move in a sodium atom is a different color than the light emitted
Depict the structural formula for 3-methylhexane : Draw the structural formula for 3-methylhexane and 2-butanol and identify the chiral carbon and the four "groups" attached to the chiral
Find the firms profit maximizing price and quantity : The firm's production manager claims that the firm's average cost of production is minimized at an output of 40 units. Furthermore, she claims that 40 units is the firm's profit-maximizing level of output. Explain whether these claims are correct.
National culture committed to liberation of human spirit : How did American Intellectuals create a national culture committed to the liberation of the human spirit? What influence did they have on the efforts of the social reformers during the first half of the 19c?
Explain the correct formula for a reactant in an equation : after the correct formula for a reactant in an equation has been written , what can be changed to balance the equation?
Future cash flows of the company : To understand the financial profile of the selected company and to project future cash flows of the company, based on a business plan.
State the percent potassium notrate in the original sample : After the reaction was comlete, the volume of the dry has produced was 1 liters at 75 degrees celsuis and 721 torr. what was the percent potassium notrate in the original sample?

Reviews

Write a Review

Econometrics Questions & Answers

  Which it believes will have zero salvage value at the end

The Acme chemical company paid $45000 for research equipment, which it believes will have zero salvage value at the end of its 5 year life. If the straight line (SL) method is used, what will be its value after 2 years

  Calculate e(c)- cov(xy)- var(c)

X and Y are two random variables. The average value of X is 40,000 and X has a standard deviation of 12,000. The average value of Y is 45,000 and the standard deviation of Y is 18,000. The correlation between X and Y is 0.80.

  Calculate the coefficients for cross-price with soda pop

a) Calculate the coefficients for price, advertising, income and cross-price with soda pop. b) If the current company cost for a bag of popcorn is $0.45, including cost of corn, cost to pop it and the bag, is this the profit maximizing price?

  Calculate the nominal and the effective rate of return

A 10-year, 12%, $1000 bond that pays dividends quarterly can be purchased for $900. If the bond is purchased and pays as scheduled, calculate the nominal and the effective rate of return that the purchaser receives.

  Determine which type of equipment company should purchase

A construction company is considering procuring one of two types of heavy construction equipment (A and B). Each type of equipment is expected to have a 5-year useful life with zero salvage value. Equipment A can be purchased at a cost of $30,000,..

  Determine what is your monthly payment

You are buying a new car for $20,000. You put $2000 down and are financing the balance. You signed a contract for the loan for 4 years. Your loan has an interest rate of 8% interest (APR). You make monthly payments and the interest is compounded m..

  Calculate mac''s optimal membership and level of profit

The Manchester Athlete's Club (MAC) is a private, not-for-profit athletic club located in St. Petersburg, Florida. MAC currently has 3,500 members but is planning on a membership drive to increase this number significantly. An important issue faci..

  Find the inverse demand curve

How much consumer surplus do consumers receive when Px = $45? c. How much consumer surplus do consumers receive when Px = $30? The demand curve for product X is given by QXd = 360 - 2PX.

  How much ice cream will the rich buy in equilibrium

There are two types of consumers of ice cream: 10 are rich and 50 are poor. Every rich consumer has a demand of 0 for a price of $500/ton; and his/her demand decreases by 1 ton each time the price increases by $1/ton. Every poor consumer has a dem..

  Write the equation for the total cost function

The Jenkis Tool Company estimated the following demand equation for it's product: QD=12,000-4,000 P Where P=price/unit QD=quantity demanded/year The firm's total costs are $4,000 when nothing is being produced.

  How many units should each plant produce to maximize profit

] A perfectly competitive firm faces a market price of $10 for its output X. It own two plants, A and B whose total costs are TC sub A = 10 + 2X + (.25X)2, TC sub B = 15 + .4X + (.1X)2, How many units should each plant produce to maximize profit at t..

  Which are the dependent and the independent variables

Badyear Rubber has developed the following input costs for their truck and bicycle tires. The same rubber is used for both products. Given the constraints they face, how many units of rubber should be used for truck tires and how many should be us..

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