Consider an HMO with a demand curve of the following form: Q = 100 – 2 P. Suppose that its marginal and average costs were $20. If the firm maximizes profits, determine its price, output, and profits.
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Consider an HMO with a
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- A firm has a linear demand function for it's product.When the price of the product is sh.20,the quantity demanded is 40 units.When the price increases to sh.240 the quantity demanded becomes 30 units.In addition,the firm's marginal cost function is giving by: Mc = 40q- 2q^2+2 Fixed cost = 5 million Where q= quantity demanded,Mc = marginal cost(sh.million) Required 1.The level of output that maximises profits 2.The maximum profit 3.The price of the product at the maximum profitBeta Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Beta hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is C = 20 + 2Q². a. What are the firm's fixed costs? b. What is the firm's marginal cost? Now suppose other firms in the market sell the product at a price of $10 c. How much should this firm charge for the product? d. What is the optimal level of output to maximize profits? e. How much profit will be earned? f. In the long run, should this firm continue to operate or shut down? Why?A Los Angeles firm uses a single input to produce a recreational commodity according to a production function f(x)=4x1/2, where x is the number of units of input. The price of the commodity is $100 per unit, and the input cost is $50 per unit. The fixed costs are zero. A: Write down the firm’s profit function. C:Find the profit maximizing amounts of input and output. What is the maximum profit? C:Suppose that the firm is taxed at $20 per unit of its output (note it is a quantity tax) and the price of its input is subsidized by $10 per unit. What is the new input and output levels? What is the new maximal profit?
- A firm has a linear demand function for it's product.When the price for the product is Sh.220,the quantity demanded is 40 units.When the price increases to Sh.240 the quantity demanded becomes 30 units.In addition,the firm's marginal cost function is given by; MC = 40Q-2Q^2+2 Fixed cost = Sh. 5 million Where Q= quantity demanded, Mc= marginal cost(cost in Sh. Million) Required 1.The level of output that maximises profits 2.The maximum profit 3.The price of the product at a maximum profitBeta Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Beta hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is C = 20 + 2Q^2. a. What are the firm's fixed costs? b. What is the firm's marginal cost? Now suppose other firms in the market sell the product at a price of $10 c. How much should this firm charge for the product? d. What is the optimal level of output to maximize profits? e. How much profit will be earned? f. In the long run, should this firm continue to operate or shut down? Why? *Please show all work*The cost function for Acme Laundry is C(q)=50+30q+q2, where q is tons of laundry cleaned. What q should the firm choose so as to maximize its profit if the market price is p?
- A firm's profit is determined by subtracting the cost of production from its revenues. Suppose we have Binjin Company selling pins at a price of p = 45. Its cost function is C(y) = y³ – 9y2 + 60y + 10, y 2 0, for y units of pins sold. Define the Binjin Company's profit function T(y) and find the interval over which it is concave and the interval over which it is convex. Draw a rough sketch of the graph of a(y) (Hint: You will be able to sketch the graph by determining the values of T(y), T'(y), and t"(y) at critical values.).A Silicon Valley firm produces an output of microchips denoted by y and has a cost function c(y). Assume that the first and second derivatives of the cost function are strictly positive. Of the chips it produces, a fraction 1 − α are unavoidably defective and cannot be sold. Working chips can be sold at a price p and the microchip market is highly competitive. How will an increase in production quality affect the firm’s profit?The marginal profit function of a firm (profit (Π), point (Q) rate change depending on quantity) is MΠ = Π ^ '= dΠ / dQ = -2Q + 120. The fixed costs of the firm produced by the company are 1000 TL. In addition, the company is known to sell the goods it produces for 200 TL. Accordingly, answer the following questions.a) Find the firm's profit function.b) Find the cost function of the firm.
- A price-taking firm's variable cost function is C = Q3, where Q is the output per week. It has an avoidable fixed cost of $1,024 per week. Its marginal cost is MC = 3Q2. What is the profit maximizing output if the price is P = $192? 0 or 5.33 or 8 5.33 or 8 0 or 5.33 0 or 8Question 6. A division of chapman corporation manufacures a pager. The weekly fixed cost for the division is 20,000 dollars and the mariginal cost is MC(q) = 0.08q³+3.6q²+60q dollars per pager. The company realizes a weekly mariginal revenue of MR(q) = 0.28q³+76.2q, 0≤ q≤ 75 dollars per pager. Find the level of production that will yield a maximum profitA firm’s objective is to Maximize Profits and Minimize Costs. Demand is Q = 600 – 3*P. The firm’s production function is Q = 5*L.6*K.5. Total Cost is TC = PL*L + PK*K = $12*L + $6*K. The objective is to maximize Profit. Find the Profit-Maximizing output. At the profit-maximizing solution, K =?