Question: 7. The demand and cost function for a company are estimated to be as follows: P =1008Q TC = 50+80Q10Q+0.6Q a. What price should the

7. The demand and cost function for a company are estimated to be as follows: P =1008Q TC = 50+80Q10Q+0.6Q a. What price should the company charge if it wants to maximize its profit in the short run? The marginal cost (MC) is the derivative of the total cost (TC) function with respect to quantity (Q). This gives us the rate of change of cost with respect to output. To find the profit-maximizing output, first find the marginal cost (MC) by differentiating the total cost (TC) function: b. What price should it charge if it wants to maximize its revenue in the short run? c. Suppose the company lacks confidence in the accuracy of cost estimates expressed in a cubic equation and simply wants to use a linear approximation. Suggest a linear representation of this cubic equation. What difference would it make to the recommended profit-maximizing and revenue-maximizing prices

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

The demand and cost function for a company are estimated to be as follows: P= 100 - 8Q TC = 50 + 80Q - 10Q2 + 0.6Q3 a. What price should the company charge if it wants to maximize its profit in the...

The demand and cost function for a company are estimated to be as follows: P = i - 80; TC = S+80Q10{1*2 +0.6{lh3 a. what price should the company charge if it wants to maximize its prot in the short...

The demand and cost function for a company are estimated to be as follows: P=1008QTC=50+80Q10Q2+0.6Q3 a. What price should the company charge if it wants to maximize its profit in the short run? b....

I need the calculations for this exercice The demand and cost function for a company are estimated to be as follows: P =100 - 8Q TC=50+80Q-10Q2 +0.6Q3 What price should the company charge if it wants...

. Question 1 (1 point) In today's world, there is no such thing as markets resembling perfect competition not even close. O a) True O b) False Save Question 2 (1 point) Once a firm gains a monopoly,...

The demand and cost functions for a company are estimated as follows: = 100 8 = 50 + 80 102 + 0.63 a. What price should the company charge if it wants to maximize its profit in the short run? b. What...

(10marks) Gasoline prices above $3 per gallon have affected what the Budget Rental Co. can charge for various models of rental cars. SUVs are $37 for one- day rental and subcompacts are $41 for...

Unit Information PEN593 Energy Economics Teaching Period: S2 2022 This guide should be used in conjunction with the Handbook as the official source of information about this unit. Refer to myMurdoch...

(PPE) in your province is regulated by the provincial government. The firm has total assets of $500,000. The revenue function for its output has been estimated as: R (Q) = 250Q - $0.15Q2. The cost...

3. American Bed Company (ABC) uses L and K to produce their beds. It is known that L and K are perfect complements in production 1:1 ratio (i.e. each machine or K, MUST be operated by exactly ONE...

Check this in general, without picking values for r1 and r2. The geometry behind the geometric mean is based on the following argument. If a random variable R takes on each of the values r1 and r2...

The following accounts and corresponding balances were drawn from Geneses Companys 2014 and 2013 year-end balance sheets: The 2014 income statement is shown below: Income Statement Sales .............

Suppose you plan to save \ ( \ $ 6 , 0 0 0 \ ) at the end of each coming year for the next 3 2 years from now for retirement. The interest rate is \ ( 3 \ % \ ) . How much will you have 3 2 years...

Discuss qualitative research designs in detail?