Suppose Dan's cost of making pizzas is C(Q)=8Q+(Q2/40),C(Q)=8Q+(Q2/40), and his marginal cost is MC=8+(Q/20).MC=8+(Q/20). Dan...
Suppose Dan's cost of making pizzas is
C(Q)=8Q+(Q2/40),C(Q)=8Q+(Q2/40),
and his marginal cost is
MC=8+(Q/20).MC=8+(Q/20).
Dan is a price taker.
a. What is Dan's supply function?
| a. | Q = 20P - 20 if P ≥ 10. |
| b. | Q = 20P + 160 if P ≥ 8. |
| c. | Q = 20P - 160 if P ≥ 8. |
| d. | Q = 40P + 160 if P ≥ 8. |
| e. | Q = 20P - 40 if P ≥ 10. |
b. What if Dan has an avoidable fixed cost of $40? What is Dan's
supply function?
| a. | Q = 20P + 160 if P ≥ 10. |
| b. | Q = 20P - 40 if P ≥ 8. |
| c. | Q = 40P + 20 if P ≥ 8. |
| d. | Q = 20P - 160 if P ≥ 10. |
| e. | Q = 40P - 160 if P ≥ 10. |
Homework Answers
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a.
Ans: c
Explanation: Inverse supply is: P = MC
b.
Ans: d
Explanation: Inverse supply is: P = MC
Add Answer to:
Suppose Dan's cost of making pizzas is
C(Q)=8Q+(Q2/40),C(Q)=8Q+(Q2/40),
and his marginal cost is
MC=8+(Q/20).MC=8+(Q/20).
Dan...
4. Suppose Dan's cost of making pizzas is -4 40 Dan is a price taker. (a)...
4. Suppose Dan's cost of making pizzas is -4 40 Dan is a price taker. (a) What is Dan's supply function? b) What if Dan has an avoidable fixed cost of $10?
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