Consider the operator of a small newsprint production plant. They fixed costs of $1600 per day...

 

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Consider the operator of a small newsprint production plant. They fixed costs of $1600 per day for property taxes, interest on debt, etc., and has additional costs that vary with the amount Q of newsprint he produces. Their total costs per day are given by: C = 1600 + 40Q +2/3Q3/2 They sell their output to local newspaper publishers and the price they obtain depends on how much they try to sell. Let the demand curve they face be P = 100 + 512Q-1/2 a) What are their average and marginal costs of production expressed as functions of Q? b) What are their total and marginal revenues expressed as functions of Q? C) How much output per day should they produce if they expands production just to the point where marginal revenue equals marginal cost? What profit if any will they make in S/day? Consider the operator of a small newsprint production plant. They fixed costs of $1600 per day for property taxes, interest on debt, etc., and has additional costs that vary with the amount Q of newsprint he produces. Their total costs per day are given by: C = 1600 + 40Q +2/3Q3/2 They sell their output to local newspaper publishers and the price they obtain depends on how much they try to sell. Let the demand curve they face be P = 100 + 512Q-1/2 a) What are their average and marginal costs of production expressed as functions of Q? b) What are their total and marginal revenues expressed as functions of Q? C) How much output per day should they produce if they expands production just to the point where marginal revenue equals marginal cost? What profit if any will they make in S/day?

Answer rating: 100% (QA)

Total Costh 2 C 1600 4 40Q20 Average losh Totas co... View the full answer