A manufacturer estimates that its variable cost for
manufacturing a given product
is given by the following expression:
C(q) = 25q2 + 2000q [$] where C is the total cost and q is the
quantity produced
a. Derive an expression for the marginal cost of production
b. Derive expressions for the revenue and the profit when the
widgets are sold
at marginal cost.
Answer
a)
MC is the change in total cost and a cange in function found by differentiation
MC=dC/dq=50q+2000
b)
the price is equal to MC
P=MC=50q+2000
TR=P*Q=50q^2+2000q
profit =TR-TC=50q^2+2000q-(25q^2+2000q)
=25q^2
the profit =25q^2
A manufacturer estimates that its variable cost for manufacturing a given product is given by the...