The following are the total cost (TC), marginal cost (MC) and total revenue (TR) functions for a competitive gadget maker: TC = £250,000 + £10Q + £0.001Q² ƏTC MC = = £10 + £0.002Q de TR = £60Q where Q is the number of gadgets produced. a) Find the optimal quantity of gadgets that maximises profit. b) Use the information obtained in part (a) to calculate the profit. c) If the gadget maker is typical of firms in the industry, calculate the firm's long-run equilibrium output and price. d) Market price declines to £40. Should the firm continue operating in the market. Explain.
Q: Find the marginal revenue function for the total revenue function given by 1 TR(Q) = 500Q- Find the…
A: a)TR(Q)=500Q-13Q3Now,MR=∂TR∂QMR=∂(500Q-13Q3)∂QMR=500-33Q3-1MR=500-Q2
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- c. Note that these results imply the marginal revenue, or marginal benefit, of website analysis is MB(X) = 11.09 − 0.2 × X and the marginal cost of website analysis is MC(X) = 0.21 × X. What level of website analysis will maximize net benefits? Round to the nearest hundredth.Bill runs a business that makes custom-printed towels. It will cost him $8 each to purchase and print on towels, and he will have to pay a rent of $1,700 per month for him workshop. Based on market research, Bill estimates that he can sell custom towels for $25 each. a) Calculate the number of towels he needs to sell per month to break-even. towels b) Calculate the break-even in dollars (round off to the nearest cent).X 1 ences If the price of oats is $3.0 per kilo, calculate the total revenue and the total profit (or loss) at the quantities shown in below table. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. Leave no cells blank - be certain to enter "0" wherever required. Mc Graw Hill Quantity (kilos) Total revenue Total cost Total profit $ 600 1800 $1,900 700 2100 $2,000 $ 800 2400 $2,400
- FITnest is one of the few fitness centers serving the greater area. The gym has been open for 3 years. It charges a flat price of $25 per visit to its clients, and the firm’s current average cost of production is $10 per visit. (You may assume that average cost has the “traditional U-shape”.) a) The owners of the gym heard you are studying economics, and they want some advice on how they could possibly increase their profits through price discrimination, which is a concept they have heard of but do not know much about. Provide an explanation of what price discrimination is and give them an example of how they could use group pricing in their climbing gym business. Explain how group pricing works to increase their profit. b) Given the current situation in the market for fitness in the area, would you expect to see competitors enter or exit the market? Explain. c) Given the current market conditions, what would you predict to observe in the long run with respect to the demand for…Vintage Camera T Temple MIS G is You have the following data for product X: sales revenue $14,000, allocated fixed costs $12,000, variable costs $20,000. You cannot increase the price of product X or improve the production process to increase profitability. What should you do about product X? O do nothing - unprofitable products are just one of the costs of doing business O keep the product both in the short term and in the long term O keep the product in the short term and drop it in the long term O drop the product both in the short term and in the long term O drop the product in the short term and keep it in the long termIf Tom sells 600 sandwiches for $10 and has an average total cost of $5, what is his profit? a) $3,500 b) $500 c) $1,000 d) $3,000
- Souvlaki Taverna is one of many restaurants in Athens, Greece which sell Souvlaki kebabs. All restaurants make the dish slightly differently. Use the following graph showing the demand (D), marginal revenue (MR), average variable cost (AVC), average total cost (ATC) and marginal cost (MC) curves of Souvlaki Taverna to answer the questions below. (a). The goal of Souvlaki Taverna is to maximize its profit. How many Souvlaki kebabs per day should it make? What price per kebab (in euros) should it charge? If Souvlaki Taverna maximizes its profit, how much is its total revenue? What about its total costs? What is its daily profit? What would the profit-maximizing output level of this business be if it operated in a perfectly competitive market instead? What price per kebab would it charge? Does the economic outcome in part (a) imply allocative efficiency? Why or why not? Does the economic outcome in part (a) imply productive efficiency? Why or why not?How do you calculate a firm's total cost and total revenue?(b) You are the CEO for a lightweight compasses manufacturer. The demand function for the lightweight compasses is given by p = 40 – 4q²where q is the number of lightweight compasses produced in millions. It costs the company $15 to make a lightweight compass. (i) Write an equation giving profit as a function of the number of lightweight compasses produced. (ii) At the moment the company produces 2 million lightweight compasses and makes a profit of $18,000,000, but you would like to reduce production. What smaller number of lightweight compasses could the company produce to yield the same profit? Problem з
- Jasmine decides to make and sell jelly cups. It costs jasmine Rs.1000 to set up and Rs.50 per cup made. She decides to sell each cup for 150. By using this information, answer the following questions: A) Write and equation for jasmine's revenue, cost and profit functions? B) Graph each function on a set of axes? C) Find the breakeven point from these graphs? ( D) How many jelly cups will jasmine need to sell in order to make a profit? (E) If jasmine wishes to make a profit of 50, how many jelly cups does she need to sell?Determine the quantity of output that generates the maximum profit. Use the green points (triangle symbol) to indicate the amount of profit at this quantity of output. Then, determine the quantity of output that generates the maximum total revenue. Use the purple points (diamond symbol) to indicate the amount of revenue at this quantity of output. Note: Plot your points in the order in which you would like them connected. Line segments will connect the points automatically. Total Revenue, Total Cost 100 90 80 70 50 40 30 20 10 OD 0 O 0 O 0 O 5 10 OF 15 O □ 20 O 25 O 30 TC 35 TR 40 45 50 ♦ Maximum Revenue Maximum Profit (?)(b) You are the CEO for a lightweight compasses manufacturer. The demand function for the lightweight compasses is given by p = 40−4q2where q is the number of lightweight compasses produced in millions. It costs the company $15 to make a lightweight compass. (i) Write an equation giving profit as a function of the number of lightweight compasses produced. (ii) At the moment the company produces 2 million lightweight compasses and makes a profit of $18,000,000, but you would like to reduce production. What smaller number of lightweight compasses could the company produce to yield the same profit?