Relationship between profits and output

Reference no: EM1369806

9 The profits of Du Pont de Nemours and Company in 1997 were about $2.4 billion. Does this mean that Du Pont's economic profit equaled $2.4 billion? Why or why not?

18 If the demand curve for wheat in the United States is P = 12.4 - 4QD where P is the farm price of wheat (in dollars per bushel) and QD is the quantity of wheat demanded (in billions of bushels), and the supply curve for wheat in the United States is P = -2.6 + 2QS, where QS of the quantity of wheat supplied (in billions of bushels), what is the equilibrium price of wheat? What is the equilibrium quantity of wheat sold? Must the actual price equal the equilibrium price? Why or why not?

33. The Mineola Corporation hires a consultant to estimate the relationship between its profits and its output. The consultant reports that the relationship is

960; = -10 - 6Q + 5.5Q2 - 2Q3 + 0.25Q4

a. The consultant says that the firm should set Q equal to 1 to maximize profit. Is it true that dπ/dQ = 0 when Q=1? Is π at a maximum when Q = 1?
b. Mineola's executive vice president says that the firm's profit is a maximum when Q=2. Is this true?
c. If you are the chief executive officer of the Mineola Corporation, would you accept the consultant's estimate of the relationship between profit and output as correct?

Reference no: EM1369806

Questions Cloud

Compute and present graphically equilibrium price : Assume that demand for oranges is given by the following equations, With quanity measured in oranges a day and price measured in dollars per Orange.

Explain how does performance management directly affect : Explain How does Performance Management directly affect the success of an organization

Quantity of equilibrium sales : Demand for refrigerators is often explained as cyclical and very sensitive to refrigerator prices & interest rates. Given these characteristics, explain the effect of each of the following in terms of;

Question on marginal benefit to consumers : Assume these customers live in Cuba and get a ration of 50 units of Q each month. What is the marginal willingness to pay at this level of consumption for each customers ?

Relationship between profits and output : The Mineola Company hires a consultant to determine the relationship between its profits and its output. The consultant reports that the relationship is

Explain it often happen that a severe risk : Explain It often happen that a severe risk or great opportunity is overlooked or underestimated in planning

Average total cost curve : For a perfectly competitive syrup producer whose average total cost curve does not change, an economic profit could turn into an economic loss if;

Explain what''s the message of the commercial? : Explain What's the message of the commercial and Many of you feel bad for this lamp and then after a well-timed pause

Calculate the equilibrium number of video arcades : Consider city of Silver Spring, where zoning laws limit the number of video arcades to one. The city only video arcade has a price of $.50 a game with an average cost of $0.34 a game.

User Account

All Pages