Write the equation for the total cost function

Reference no: EM13213238

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. These costs increase by 50 cents for each unit produced.

a. Write the equation for the total cost function.

b. Specify the marginal cost function.

c. Write an equation for total revenue in terms of Q.

d. Specify the marginal revenue function.

e. Write an equation for total profits, ?, in term of of Q. At what level of output are total profits maximized (i.e., find the maximum of the total profit function)? What price will be charged? What will total profit be?

f. Check your answers in Parte € by equating marginal cost and marginal revenue and solving for Q. g. What model of market pricing behavior has been assumed in this problem?

Reference no: EM13213238

Questions Cloud

Profitability index for project : The project is estimated to generate 2,640,000 in annual sales, with costs of 1,056,000. The tax rate is 30 % and the required return for the project is 15%. What is NPV, IRR, Payback, and Profitability Index for project ?

Explain how many calories are present in a snickers : snickers bar holds 1.17 megajoules of energy. How many large calories or Calories are present in a snickers bar?

Analyze the structures of the compounds : Examine the structures of the following compounds. What functional groups can you identify within the compounds? (They may have more than one.) What structural features do many of these compounds have in common?

What would be the price of corporate bond : If there is no change of default what would be the price of this corporate bond and there was a default-free bond with the same cash flows as the corporate bond described above, what would its price be?

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.

Explain copper sulphate solution using a current : What mass of copper would you expect to be deposited from a copper (II) sulphate solution using a current

Explain delta-e for the system : Place a coffee cup that holds hot coffee in a cold room and let it sit there for 4 hours. Consider the coffee inside the coffee cup as your system

Compute the natural rate of unemployment : Suppose that the Phillips curve is given by ?t-?t^e= 0.1-2?t where ?t^e=?t-1 Suppose that inflation in year t-1 is zero. In year t, the authorities decide to keep the unemployment rate at 4% forever. 1. Compute the natural rate of unemployment.

Benchmark in terms of portfolio returns : Compare Joe's and Kim's performance relative to the benchmark in terms of portfolio returns and determine which manager is performing better than the market in a risk adjusted basis.

User Account

All Pages