Determining expected market price-profits

Assignment Help Microeconomics

Reference no: EM1371277

You're the manager of the firm that sells a commodity in market that resembles perfect competition, and your cost function is C(Q)=Q+2Q^2. Unfortunately, due to production lags, you must make your output decision prior to knowing for certain the price that will prevail in the market. You believe that there is a 60 percent chance the market price will be $100. and a 40 percent chance it will be $200.

a. Compute the expected market price.

b. What output should you produce in order to maximize expected profits?

c. What are your expected profits?

Reference no: EM1371277

Questions Cloud

Find the force exerted by the man : A 300 kg piano slides 4.50 m down a 30° incline and is kept from accelerating by a man who is pushing back on it parallel to the incline. The effective coefficient of kinetic friction is 0.40.

Create the application to enter-search-edit information : You are neede to create the application to enter, search, edit and view personnel information of staff in company. This application is used by Human Resource, staff and administrator of application.

Poverty fighting measure : The minimum wage is used by governments as poverty fighting measure. The use of such means of creating equity among the masses does not always result in desired outcome.

Service providers managing queues : How do service providers with which you are familiar manage queues? How effective have they been at managing queues? Do you believe the appropriate method for managing queues is currently being utilized?

Determining expected market price-profits : You're the manager of the firm that sells a commodity in market that resembles perfect competition, and your cost function is C(Q)=Q+2Q^2. Compute the expected market price.

From the e-activity and identify one firm that you think : From the e-Activity and identify one firm that you think would make a good strategic partner for the company you researched.

With what speed does rock impact the moon : For a spherical celestial object of radius R, acceleration due to gravity g at a distance x from the center of the object is g = g0R2/x2, where g0 is the acceleration due to gravity at the object's surface and x > R.

Write files which do not reside at root or master directory : Provide the example of names of three files from own computer that do not reside at the root or master directory. For each file, list both therelative filename and its complete filename.

Evaluate the sales tax as progressive or regressive : How much more output each year will have to be produced in the world

User Account

All Pages