On weekends during summer months, Eric Cart man rents jet skis at the beach on an hourly
Question:
On weekends during summer months, Eric Cart man rents jet skis at the beach on an hourly basis. Last week, Cart man rented jet skis for 20 hours per day at a rate of $50 per hour. This week, rentals fell to 15 hours per day when Cart man raised the price to $55 per hour.
Using these two price-output combinations, the relevant linear demand and marginal revenue curves can be estimated as:
P = $70 - $1Q and MR = $70 - $2Q
A. Calculate the revenue-maximizing price-output combination. How much are these maximum revenues? If marginal cost is $30 per hour, calculate profits at this activity level assuming TC = MC × Q.
B. Calculate the profit-maximizing price-output combination along with revenues and profits at this activity level.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
A To find the revenuemaximizing priceoutput rental r...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
65+ Reviews
86+ Question Solved
Related Book For 
Question Posted:
