HomeworkLib
Question

4. The total cost function of a firm is TC = 10+ 2Q-0.2Q2+0.01Q3. The price of...

4. The total cost function of a firm is TC = 10+ 2Q-0.2Q2+0.01Q3. The price of the output is $6.

a) What is the marginal cost function of the firm?

b) What are the total and total variable cost functions and the average total cost function of the firm?

c) What are the fixed costs of the firm?

d) What is the profit maximizing rate of output? What are the profits? How do you know the rate of output maximizes profits instead of minimizes profits?

e) What is the lowest price for which the firm will produce in the short run? The shutdown point is the minimum point of the AVC.

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
4. The total cost function of a firm is TC = 10+ 2Q-0.2Q2+0.01Q3. The price of...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • 1. If each competitive firm in an industry has the short run cost function TC=50+5q+q2, and...

    1. If each competitive firm in an industry has the short run cost function TC=50+5q+q2, and MC=5+2q. The market price is $35. a. What is the profit maximizing output level for each firm? b. What are the profits? c. Now, suppose that fixed costs were $250 instead of $50, so the firm faces the short run cost function TC=250+5q+q2. How does this change affect the firm’s output decision and profits? Should the firm continue to operate in the short run?

  • 8. Consider the following Demand (Price and Marginal Revenue) and Cost (Total and Marginal) relationships expressed...

    8. Consider the following Demand (Price and Marginal Revenue) and Cost (Total and Marginal) relationships expressed as functions of Q: Price = P(Q) = 310 – 2Q TC = TC(Q) = 3500 + 70Q + Q2 MR = MR(Q) = 310 – 4Q MC = MC(Q) = 70 + 2Q a. What is the profit-maximizing level of output? What is the price at that level? b. Should the firm continue operating in the short run? In the long run? c....

  • 1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions:...

    1) A perfectly competitive firm faces the following Total revenue, Total cost and Marginal cost functions: TR = 10Q TC = 2 + 2Q + Q2 MC = 2 + 2Q At the level of output maximizing profit , the above firm's level of economic profit is                                                                                                           A) $0 B) $4 C) $6 D) $8 *Additional information after I did the math: The price this firm charges for its product is $10, the level of output maximizing profit is 4...

  • Consider a competitive rm with total costs given by TC(q) = 100 + 10q + q^2,...

    Consider a competitive rm with total costs given by TC(q) = 100 + 10q + q^2, The firm faces a market price p = 50. (a) Write expressions for total revenue TR and marginal revenue MR as functions of output q. (b) Write expressions for average total cost ATC, average variable cost AVC, and marginal cost MC as functions of output q. (c) For what value of output is ATC minimized? (d) Find the profit maximizing level of output q...

  • A price-taker firm has a short run total cost function given by: TC=1.2+5q+0.3q2. Calculate the short...

    A price-taker firm has a short run total cost function given by: TC=1.2+5q+0.3q2. Calculate the short run price at which this profit- maximizing, price taker would shutdown in the short run. (Do not include a "$" sign in your response.) Answer:

  • Exercise 1. Your firm produces basketballs. The inverse demand function for your basketballs is given by: P = 100 – 3q....

    Exercise 1. Your firm produces basketballs. The inverse demand function for your basketballs is given by: P = 100 – 3q. The cost function is C = 8 + 2q². a. Write down a function that states the firm's profit as a function of the amount of output (basketballs produced). b. What is the profit-maximizing amount of output? How much profit does it make when it maximizes profits? Total Revenue? Costs? c. At what minimum price will the firm produce...

  • 1. Suppose that a firm operating in perfectly competitive industry has short-run cost function given by...

    1. Suppose that a firm operating in perfectly competitive industry has short-run cost function given by C(q) = 5+2q+9. The market price is $10. (a) What is the profit-maximizing output level for this firm? (b) What is the firm's total revenue and profits at the profit-maximizing output? (c) What is the minimum price at which the firm will produce a positive level of output in the short run?

  • 4. The engineering department has estimated your firm's cost function to be TC(O) = 5,000 +...

    4. The engineering department has estimated your firm's cost function to be TC(O) = 5,000 + Q-Q? + Q: 13 This cost function has a marginal cost function MC(Q) = 1 -2Q+Q? a. Is this your long run or short run cost function? b. How much will it cost to produce 100 units? c. What is the average cost of 100 units? d. What is the marginal cost of the 100th unit? e. At what quantity is minimum average variable...

  • A firm produces a product in a competitive industry and has a total cost function (TC)...

    A firm produces a product in a competitive industry and has a total cost function (TC) of TC(a) 60+4q+2q2 and a marginal cost function (MC) of MC(q) = 4 + 4q. At the given market price (P) of $20, the firm is producing 4.00 units of output. Is the firm maximizing profit?V What quantity of output should the firm produce in the long run? The firm should produce unit(s) of output. (Enter your response as an integer.)

  • Suppose the total cost function for a firm is given by: TC= 100 + 2q +4q2....

    Suppose the total cost function for a firm is given by: TC= 100 + 2q +4q2. Find the marginal cost function and then use that to determine the marginal cost of the 10th unit.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT