Reference no: EM132235805
Could someone explain/answer a-f
Your company has estimated its total cost to be TC = 7000 + 0.05Q + 0.0015Q2; its marginal cost is thus MC = 0.05 + 0.003Q, where Q is the quantity of units produced and TC is in dollars. Since your market is relatively competitive, your company is able to sell its output for $13.55 each (which thus yields MR = 13.55 and TR = 13.55Q).
a. What is the optimal level of output for your company to produce/sell?
b. What is the marginal revenue from the last unit sold? c. What is the total revenue from selling the optimal number of units?
d. What is the total cost from selling the optimal number of units?
e. What is the profit (net benefit/net revenue/etc.) from selling the optimal number of units?
f. An eager intern at your company suggests that, since the company earns $13.55 revenue for each unit sold, then the company could make still more profit by selling more than the level chosen in part b; why would your company not want to produce and sell more output than the level you chose in part b: Select one: a. It reduces profit since costs increase faster than revenue. b. Profit becomes negative. c. Profit increases too rapidly. d. At any level other than the optimum, total cost exceeds total revenue.
How the selected model has striven to contain the costs
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