User Account

All Pages

Write the equation for the firms marginal revenue

Assignment Help Econometrics
Reference no: EM13224517

Inverse Demand: P = 40 - 4Q
Total Cost: C = 10 + Q ^2
Marginal Cost: MC = 2Q

a. Write the equation for the firm's Marginal Revenue (MR).

b. Based on the information about the firm costs, including your answer in part a., fill out the table below. It is okay to have MR and MC at Q = 0.

c. Graph the demand curve, MR, and MC on the same graph, using the above table.

d. Identify the profit maximizing quantity for the firm (Q M), price (P M), Marginal Revenue (MR), and Marginal Cost (MC) at this profit maximizing quantity.

e. Explain in plain English why a smaller quantity than Q M does not maximize profit.

f. Compute the firm's profit from part d.

g. Solve algebraically for the profit maximizing quantity (QM) and price (P M). You should get the same answer as in d.

h. If this was a competitive industry, the resulting quantity would be where P = MC. Solve for the competitive quantity (Q C) and price (P C). Hint: set P = MC to solve for Q, then plug Q into either P or MC equation.

i. Is the price higher when firms have market power or when they do not, based on g. and h.?

Reference no: EM13224517

Questions Cloud

Explain how the vw case reflects this situation : Companies can be hurt by rapid changes in exchange rates even if their initial hedging actions appear reasonable. Explain how the VW case reflects this situation and what it could have done differently to manage the adverse impact of dollar deprec..
Advise hatfield ofhis rights : The only reference in the agreement to the equipment stated that it was to be a "new model XVX self-propelled combine -Advise Hatfield ofhis rights. Discuss the defences available to Hatfield's claim(s).
Washington mutual bank failure : Washington Mutual Bank Failure- Describe how specific organizational behavior theories could have predicted or explained the company's failure
Explain the volume and temperature changes : Determine Ssys separately for the volume and temperature changes and show that ?Ssys = 0 for a reversible adiabatic process.
Write the equation for the firms marginal revenue : If this was a competitive industry, the resulting quantity would be where P = MC. Solve for the competitive quantity (Q C) and price (P C). Hint: set P = MC to solve for Q, then plug Q into either P or MC equation.
Objective function coefficient for variable : What will happen to the solution if the objective function coefficient for variable 1 decreases by 20? Nothing.  The values of the decision variables, the dual prices, and the objective function will all remain the same. The value of the objective fu..
What is the equation for the budget constraint : Suppose Alex's utility function for tops (x) and candy (z) is: U(x,z)= x¾ z¼ . Suppose this year she has income of 1,000 to spend on these two goods. The price of a unit of x is $25 and the price of a unit of z is $5. Her marginal utility of x is ..
Calculate the overall coefficient of performance : The family estimates that it will take an average of 21 GJ of energy per month to keep the house heated to this temperature for 5 cold months. The cost of electrical energy is $0.185/kWh (kilowatt-hour).
What will happen in the market for personal computers : If the price of processor chips used in manufacturing personal computers decrease, what will happen in the market for personal computers How will the equilibrium price and equilibrium quantity of personal computers change

Reviews

Write a Review

Econometrics Questions & Answers

  Who would win and what would the winning price be

Which auction should you choose to maximize your profit? The first-price bidders shade their bids by 20% of their evaluation of its value. The second-price bidders all utilize the optimal strategy for second price auctions stated in the textbook.

  What would be the appropriate elasticity to compute

In Smalltown, the price of Twinkies fell from $0.80 to $0.70. As a result the quantity demanded of HoHo's decreased from 120 to 100. What would be the appropriate elasticity to compute Use the midpoint method, compute this elasticity. What does yo..

  Calculate accounting profits and economic profits for john

John runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth)

  Determine the sydneys economic profit

Sydney is interested in starting a new business, but would have to give up a job with a total compensation of $100,000 per year. After researching the new business opportunity, Sydney developed the following estimates. Annual Revenues: $300,000

  How much more will alexx have than spenser

Many retirement funds charge and administrative fee equal to 0.25% on managed assets. Suppose that Alexx and Spenser each invest $5,000 in the same stock this year. Alexx invests directly and earns 5% a year. Spenser uses a retirement fund and ear..

  The firm faces how much selling price

Making dresses is a labor-intensive process. Indeed, theproduction function of a dressmaking firm is well described by theequation Q = L - L2/800, where Q denotes the number ofdresses per week and L is the number of labor hours per week.

  What is the companys fixed cost

How many units should be produced to maximize profit? How do this company's marginal costs behave as output increases? Provide a logical explanation as to why a computer manufacturer's marginal costs might behave in this way.

  Describe the compounding scheme used by the bank

A local bank advertised the following information: interest 6.89% - effective annual yield 7.128% . no mention was made of the interest period on the advertisement. Can you figure out the compounding scheme used by the bank

  What price should the manager charge for the calculators

The California Instruments Corporation, a producer of electronic Equipment, makes pocket calculators in a plant that is run autonomously. The plant has a capacity output of 200,000 calculators per year, and the plant's manager regards 75 percent o..

  What is the new equilibrium wage differential

Suppose now that an advertising campaign, paid for by the employers who offer risky jobs, stresses the excitement associated with "the thrill of injury," and this campaign changes the attitudes of the work force toward being employed in a risky jo..

  What amount would you need to invest today

What amount would you need to invest today in order to set asside sufficient funds now to meet the future obligations Assume your money could earn 5.0% per year in low risk securities in the 7 year period in question.

  What is the marginal opportunity cost of producing

a) what is the marginal opportunity cost of producing the second unit of clothing b) what is the total opportunity cost of producing the second uit of closthing c) what is the marginal opportunity cost of producing the third unit of clothing

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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