Explanation

Problem 5 A price-taking firm's variable cost function is VC = Q', where Q is its output per week. It has a sunk fixed cost of $3,000 per week. Its marginal cost is MC = 3Q'. What is its profit-maximizing output when the price is P = $243? What if the fixed cost is avoidable? Problem 8 Consider again Problem 7. If Dan's cost increases by $2 per pizza, so that his cost function becomes ((Q) = 60 + (Q2/40) and his marginal cost becomes MC = 6 + (Q/20), how will his supply function change? Problem 7: Suppose Dan's cost of making pizzas is C(Q) = 4Q + (Q2/40), and his marginal cost is MC = 4 + (Q/20). Dan is a price taker. What is Dan's supply function? What if Dan has an avoidable fixed cost of $10?Chapter 10 Problem 2 In each of the following cases, calculate the PDV of the specified amount under the specified circumstances. a. $6,300 received in eight years, at an interest rate of 4 percent. b. $115,000 received in two years, at an interest rate of 18 percent. c. $45,000 received in 100 years, at an interest rate of 1 percent. Problem 3 Calculate the PDV of the following bonds. a. A 5-year bond with an annual coupon payment of $200, and a principle payment at maturity of $5,000, at an interest rate of 4 percent. b. A 15-year bond with an annual coupon payment of $50, and a principle payment at maturity of $600, at an interest rate of 10 percent