How many windows should ron wash to maximize profit

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Reference no: EM131248471

Ron's Window Washing Service is a small business that operates in the perfectly competitive residential window washing industry in Evanston, Illinois. The short-run total cost of production is STC(Q) = 40 +10Q + 0.1Q² , where Q is the number of windows washed per day. The corresponding short-run marginal cost function is SMC(Q) = 10 = 0.2Q. The prevailing market price is $20 per window.

a) How many windows should Ron wash to maximize profit?

b) What is Ron's maximum daily profit?

c) Graph SMC, SAC, and the profit-maximizing quantity. On this graph, indicate the maximum daily profit. O

d) What is Ron's short-run supply curve, assuming that all of the $40 per day fixed costs are sunk?

e) What is Ron's short-run supply curve, assuming that if he produces zero output, he can rent or sell his fixed assets and therefore avoid all his fixed costs?

Reference no: EM131248471

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