Given the estimated marginal cost function

Assignment Help Microeconomics
Reference no: EM13678957

EverKleen Pool Services provides weekly swimming pool maintenance in Kumasi. Dozens of firms provide this service. The service is standardized; each company cleans the pool and maintains the proper levels of chemicals in the water. The service is typically sold as a four-month contract. The market price for the four-month service contract is Gh?115.
EverKleen Pool Services has fixed costs of Gh?3,500. The manager of EverKleen has estimated the following marginal cost function for EverKleen, using data for the last two years:
SMC = 125 - 0.42Q + 0.0021Q2
Where SMC is measured in Ghana Cedis and Q is the number of pools serviced each time. Each of the estimated coefficients is statistically significant at the 5 percent levels.
i. Given the estimated marginal cost function, what is the average variable cost function for EverKleen?
ii. At what output level does AVC reach its minimum value? What is the value of AVC at its minimum point?
iii. Should the manager of EverKleen continue to operate, or should the firm shut down? Explain.
iv. The manager of EverKleen finds two output levels that appear to be optimal. What are these levels of output and which one is actually optimal?
v. How much profit (or loss) can the manager of EverKleen Pool Services expect to earn?
vi. Suppose EverKleen's fixed costs rise to Gh?4,000. How does this affect the optimal level of output? Explain.

Reference no: EM13678957

Questions Cloud

Define what is the vapor pressure of the solution : Assume at 25C the vapor pressure of pure benzene is 100.84torr. Define what is the vapor pressure of the solution made from dissolving 19.7 g of biphenyl in 28.5 g of benzene
How the marketing and economic approaches deal : How the marketing and economic approaches deal
Explain what is the molar concentration of the solution : While 4.33g of a nonelectrolyte solute is dissolved in water to make 205mL of solution at 21 C, the solution exerts an osmotic pressure of 891torr.
Compute the ph and the poh of the solution at 25 °c : Define a solution of NaOH(aq) contains 8.4 g of NaOH(s) per 100.0mL of solution. Compute the pH and the pOH of the solution at 25 °C.
Given the estimated marginal cost function : Given the estimated marginal cost function, what is the average variable cost function for EverKleen?
Define a flow chart that depicts scheme : Make a scheme to separate Sr2+ , K+ , and Ag+ cations in solution as well as define a flow chart that depicts your scheme.
What price does it pay for the factor : What price does it pay for the factor?
Utilize frost''s circle to construct an orbital diagram : Utilize frost's circle to construct an orbital diagram for cycloheptatrienyl cation. Is this aromatic as per to huckel's rule
Define what was this flash of insight : Being an organic TA she proverb the students' attempt in performing a grignard reaction due to the presence of water in their mixture. Define what was this flash of insight and how was the graduate student able to use it to obtain her Ph-D. Provid..

Reviews

Write a Review

Microeconomics Questions & Answers

  Write down the advantages and disadvantages of using

what are the advantages and disadvantages of using import-substitution to accomplish industrialization rather than

  Automation is the prime cause of unemployment

minimum wage legislation increases costs of production (and thus product prices) and creates an excess supply (unemployment) of unskilled labor.

  During the recession in the early 1990s retailers observed

during the recession in the early 1990s retailers observed that consumers were spending a lot more time searching for

  List some of products you typically purchase as a consumer

Identify the market structure(s) for the products listed Is advertising is associated with the identified market structure(s). If so, explain why advertising and/or product differentiation is important to this particular market structure.

  Evaluate the clean air act

Evaluate the Clean Air Act and determine if it has been effective from an economic standpoint. Explain your reasoning. Based on your evaluation of the Clean Air Act and additional efforts to address pollution, make policy recommendations that woul..

  Evaluate the impact of the proposal to cut prices

Evaluate the impact of the proposal to cut prices and what is the optimal profit-maximizing markup suggested by economic theory?

  Explain what would be likely outcomes in economy use

the policies of the federal government influence the outcomes of the various activities in that economy. when

  Demand to evaluate the wisdom of such a tax

1. Los Angeles is committed to raising $1 billion for a new stadium. It is considering a $1 surtax on all cab rides because most cab rides are by non-residents. Use supply and demand to evaluate the wisdom of such a tax.

  According to exhibitor relations co in 2006 average movie

according to exhibitor relations co. in 2006 average movie ticket prices were 6.55 and attendance was 1.4 billion in

  A firm determines its marginal revenue

Economics is profitable for a firm to continue employing additional resources?

  Can technologies actually reflect political relationships?

Make sure your explanation is clear and that you provide specific examples. Any quotes from the readings or external materials must include quotation marks and an in-text citation.

  Lowering the interest rate to stimulate the economies

Explain why the European Central Bank cannot selectively change interest rates in any of the 16 EU countries that have adopted the euro—for example, lowering the interest rate to stimulate the economies of Greece, Ireland, or Spain, while maintaining..

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