Illustrate what are these levels of output

Assignment Help Business Economics

Reference no: EM1367653

Q. Evergreen Pool Services (EPS) provides weekly swimming pool maintenance in Jeddah. Dozens of industries provide this service. Service is standardized; each company cleans pool and maintains proper levels of chemicals in water. Service is typically sold as a four-month summer contract. Market cost for 4-month service contract is US$115.
EPS has fixed costs of US$3500. Manager has estimated following marginal cost function for EPS, utilizing data for last two years:
MC = 125 & Actheirc 0.42Q + 0.0021Q2
Where MC is measured in dollars and Q is number of pools serviced each summer. Each of estimated coefficients is statistically significant at 95 percent confidence level.

1-Given estimated marginal cost function, Illustrate what is average variable cost function for EPS?

2-At Illustrate what output level does AVC reach its minimum value? Illustrate what is value of AVC at its minimum point?

3-Should manager of EPS continue to operate, or should industry shut down? Elucidate.

4- Manager of EPS find outs two output levels that appear to be optimal. Illustrate what are these levels of output and which one is actually optimal?

5-How much profit (or loss) can manager of EPS expect to earn?

6-Assume that EPS fixed costs rise to US$4000. How does this affect optimal level of output? Elucidate.

Reference no: EM1367653

Questions Cloud

Write algorithm for program to compute the sum of number : Write an algorithm for a program which will satisfy following requirements: - Asks a user how many numbers they want to calculate.

Identifying clinical or practice experts : what is the value in identifying clinical or practice experts to help you accomplish your learning objectives? How do you choose and work with a mentor?

Illustrate what happens to employment output : Congress cannot dictate how many workers industries hire at mandated wage. Given this fact, Illustrate what are effects of this law. Specifically, illustrate what happens to employment, output and total amount earned by workers.

Important question based on macroeconomics : Over the past two decades, according to the U.S. balance of payment, the current accounts and the capital account balance tend to move in same direction.

Illustrate what are these levels of output : Manager of EPS find outs two output levels that appear to be optimal. Illustrate what are these levels of output and which one is actually optimal.

Write program which instantiates objects of classes : Private data of Quadrilateral must be the x-y coordinate pairs for four end-points of the Quadrilateral. Write a program which instantiates objects of your classes and outputs each objects area (except Quadrilateral.

Explain the law of demand : Explain the law of demand. Why does a demand curve slope downwards? Distinguish between a change in demand and a change in quantity demanded.

Clinical manifestations during menopause : The patient states she has had hot flashes, vaginal dryness, and increased emotional lability. Explain why the patient would have such clinical manifestations throughout menopause.

Income and substitution effects : What happens to the student's budget line? Illustrate the change with new books on the vertical axis. Is the student worse off or better off after the price change. Explain.

User Account

All Pages