Find the firms profit maximizing price and quantity

Assignment Help Econometrics
Reference no: EM13239165

A firm uses a single plant with costs
C = 160 + 16Q + 0.1Q2 and faces the Price equation P = 96 - 0.4Q.

1. Find the firm's profit maximizing price and quantity. What is its profit?

2. The firm's production manager claims that the firm's average cost of production is minimized at an output of 40 units. Furthermore, she claims that 40 units is the firm's profit maximizing level of output. Explain whether these claims are correct.

3. Could the firm increase its profit by using a second plant (with costs identical to the first) to produce the output in part (1)? Explain.

Reference no: EM13239165

Questions Cloud

Determine the focal length does the lens need : A slide projector needs to create a 86 cm high image of a 2.0 cm tall slide, What focal length does the lens need and How far should you place the lens from the slide
Explain what is the concentration of the chloride ion : What is the concentration (in M) of the chloride ion when 16 mL of a 0.625 M solution of sodium chloride is combined with 17.3 mL of a 0.551 M solution of iron(III) chloride to a final volume of 56.5 mL
Compute projected profit for the order quantities suggested : Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales equal 10,000 units, most likely case in which sales equal 20,000 units, and best case
Explain what is the half-life of the radioisotope : A sample of a radioisotope shows an activity of 999 disintegrations per minute due to beta decay. If after 1.10 years the activity is 952 disintegrations per minute, what is the half-life of this radioisotope
Find the firms profit maximizing price and quantity : The firm's production manager claims that the firm's average cost of production is minimized at an output of 40 units. Furthermore, she claims that 40 units is the firm's profit maximizing level of output. Explain whether these claims are correct.
Find the total change in the planets velocity : Over a time interval of 2.16 years, the velocity of a planet orbiting a distant star reverses direction, Find the total change in the planet's velocity in m/s
Define what is the concentration of the sodium ion : What is the concentration of the sodium ion (in M) in a solution of 0.607 M sodium sulfate
Why was microsoft investigated for antitrust behavior : Microsoft Monopoly--Why was Microsoft investigated for antitrust behavior Do you agree or disagree that Microsoft was trying to gain monopoly power in the computer software industry Are monopolies always bad
How much heat is evolved or absorbed when water cools : How much heat (in J) is evolved or absorbed when a 36.9 g sample of water (specific heat = 4.18 J/(g K)) cools from 87.7oC to 79.2oC

Reviews

Write a Review

Econometrics Questions & Answers

  What prediction would you make about advertising rates

In 1989, the Detroit Free Press and Detroit Daily news (the only newspapers in the city) obtained permission to merge under a special exemption from the antitrust laws. The merged firm continued to publish the two newspapers

  How much money must the engineer set aside in the project

A young engineer wishes to become a millionarie by the time he is 60 years old. He believes that by careful investment he can obtain a 15% rate of return. He plans to add a uniform sum of money to his investment program each year, beginning on his..

  What price will samsung set for dram chips

The inverse-market demand curve for DRAM chips is P = 50 - Q, where Q is the total industry output and P is the market price. The marginal cost of producing DRAM's is $15. There are no fixed costs associated with producing the chips.

  What was the growth of velocity between these two years

During this holiday, he gave his first Fireside Chat, a radio address where he explained his policies to the American people in plain language. After the four-day holiday, he still kept one-third of all U.S. banks closed (mostly small farmer banks..

  Compute the break-even quantities

The revenue and cost functions for producing and selling quantity x for a certain production facility are given below. R(x) = 16x - x2 C(x) = 20 + 4x a) Determine the profit function P(x). b) Use Excel to graph the functions R(x), C(x) and P(x) for t..

  Obtain market equilibrium price and quantity using algebra

Suppose there are 8,000 identical individuals in a market for Latin Dance videos, each with a demand function represented by Qdx=12-2Px, and 400 identical producers of Latin Dance videos, each with a supply function of Qsx=10Px.

  Define standard normal distribution

What is the probability that the interval [Z-1, Z+1] contains the value 0? e.) What is the probability that the interval [Z-1, Z+1] contains the value 2? f.) What is the probability that the interval [Z-1, Z+3] contains the value 2? g.) What is the p..

  What is the opportunity cost of tammies trip to the concert

Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to fly to another city to attend the concert of her favorite music group. The cost of transportation for the trip is $250. The cost of the concert ticket is $50.

  Why is the yield to maturity necessarily less

to pay for college, you have just taken out a $1000 gov. loan that makes you to pay $126 per year for 25 years. however, you don't have to start making the payment until you graduate from college two years from now. why is the yield to maturity ne..

  Determine the overall welfare loss to venezuela

Suppose Venezuela imports TV sets at a price of $150 each. Under free trade, how many sets does Venezuela produce, consume, and import? Determine Venezuela's consumer surplus and producer surplus. b. Assume that Venezuela imposes a quota that limit..

  What is the breakeven level of daily output for the firm

Go Hard has total fixed costs of $2,160 per day. The firm manufactures Go Hard advice kits. The kits have a short-run average variable cost of $48, and all of them can be sold for $66 each. Assuming constant per unit variable costs in the relevant..

  Estimate the mean score on the exam for students

An insurance company wants to estimate the mean score on this exam for students who have enrolled in a special study program. They take a sample of 8 students in this program and determine that their scores are: 2, 5, 8, 8, 7, 6, 5, and 7. This sa..

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!

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