User Account

All Pages

Firm average aggregated cost equation

Assignment Help Business Economics
Reference no: EM13904832

In this module, it is demonstrated that sometimes extensive diseconomies of scale, say, due to high transportation costs, would require that the firm produce its product in a multiple of plants. Suppose a beer brewing company has determined that its total production cost is TC= 1000Q-1.2Q^2 +0.004Q^3 where Q is its annual output measured in metric tons.

A. The average hauling (freight) cost is $0.8Q; that is AFC=0.8Q. Write the firm's average aggregated cost equation.

B. Now suppose the firm is facing the following market demand: Q=760,000-10P
Determine the optimal number of plants that the firm should have to take full advantage of the market demand.

C. Calculate the firm's profit.

For 5 extra bonus points:

D. Compare the firm's profit with multiple plants with its profit with a single plant.

Hint: The firms MC equation based on its aggregated total cost (including the freight cost) is MC=1000-0.8Q+0.012Q^2

Reference no: EM13904832

Questions Cloud

Warton company posts its sales invoices : Warton Company posts its sales invoices directly and then binds them into a Sales Journal. The company had the following credit sales to these customers during July.
Amount of interest paid by debbie : Debbie McAdams paid 8% interest on a $12,500 loan balance. Jan Burke paid $5,000 interest on a $62,500 loan base on 1 year (a) what was the amount of interest paid by Debbie?
Find the potential inside the sphere : Is there any change in the solution if the sphere is kept at a fixed potential V? What about if the sphere has a total charge Q on its inner and outer surfaces?
Calculate surface-charge densities at arbitrary point : Calculate the surface-charge densities at an arbitrary point on the plane and on the boss, and sketch their behavior as a function of distance (or angle).
Firm average aggregated cost equation : In this module, it is demonstrated that sometimes extensive diseconomies of scale, say, due to high transportation costs, would require that the firm produce its product in a multiple of plants. Suppose a beer brewing company has determined that i..
What is true about disparate-treatment discrimination : Identify the true statement about principal-agent and employer-employee agency relationships. What is true about disparate-treatment discrimination
Public service organization has found that its membership : What do you think the decision and the information needs should be in this case? Should the first priority be to determine why previous efforts have failed? What alternative courses of action would you recommend evaluating through research?
Role in research project were to perform statistical analyes : Suppose that your role in a research project were to perform statistical analyses and help explain them for the research report. You realize later that, of the many dozens of analyses run, only those explicitly supporting a costly departmental expans..
Checkpoint-what are the four types of conflict : What are the four types of conflict? Why can ego conflict damage relationships? How can conflict bring about positive results? Why is “I” a better word to use than “you” when you are angry?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

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