Suppose a firm sells in a highly competitive market where the going price is $15 per unit.
Question:
A. Find the profit maximizing level of output for the firm. Determine its level of profit. Profit, π = TR-TC = (P*Q) – C = 15Q – 25 – 0.25Q2.
B. Suppose that fixed costs rise to $75. Verify this change does not affect the firm’s level of output.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 77% (9 reviews)
A For profit maximization the first order necessary condition is that d dQ 0 ie dTR ...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
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Microeconomics An Intuitive Approach with Calculus
ISBN: 978-0538453257
1st edition
Authors: Thomas Nechyba
Question Posted:
Students also viewed these Economics questions
-
Suppose a firm sells in a competitive market at a fixed price of $12 per unit. The firm's cost function is C = 200 + 4Q. Determine the minimum quantity at which the firm can break even. Are there...
-
KIT Corporation operates in a highly competitive market where jobs are obtained by bids. KIT uses a policy of bidding full cost plus a 25 percent markup. The company operates two support departments...
-
The best definition of productivity is: A. Level of output for a given degree of input B. Measurement of quality of service rendered C. Number of full time equivalents available for a given task D....
-
Caine Bottling Corporation is considering the purchase of a new bottling machine. The machine would cost $200,000 and has an estimated useful life of 8 years with zero salvage value . Management...
-
Uniform flow at a depth of 2 meters occurs in a rectangular channel that is 4 meters wide. The channel is laid on a slope of 0.001, and the Manning coefficient is 0.025. Determine the maximum depth...
-
A hedge fund has created a portfolio using just two stocks. It has shorted $35,000,000 worth of Oracle stock and has purchased $85,000,000 of Intel stock. The correlation between Oracles and Intels...
-
Twenty-five successive samples of 200 propellers, each taken from a production line, contained, respectively, 1, 8, 4, 6, 10, 7, 9, 5, 1, 0, 4, 8, 10, 3, 12, 5, 9, 16, 13, 7, 8, 4, 2, 9 and 2...
-
Payout Ratio and Book Value per Share Divac Company has developed a statement of stockholders equity for the year 2010 as follows: Divacs preferred stock is $100 par, 8% stock. If the stock is...
-
Chuck Wagon Grills, Incorporated, makes a single product-a handmade specialty barbecue grill that it sells for $210. Data for last year's operations follow: Units in beginning inventory Units...
-
Your firm has the following securities outstanding: common stock (market value $4,500,000; investors demand 17% annual rate of return), preferred stock (market value $1,700,000; current annual yield...
-
The demand for good x is given by Qdx= 1200- 1/2Px+1/4Py-8Pz+1/10M Py = $5900 Pz = 90 M = 50550 a. Indicate whether goods Y and z are substitutes or complements for good x b. Is x an inferior or...
-
Max is a home builder in the Midwest. Although sales have slowed because of the recession, it looks like the recession is about to end. He wants to be ready with material, labor, and foremen to meet...
-
What is the benefit of basing strategic decisions on payback period? What problems does use of this metric present?
-
Which statement is the most accurate? a) Globalization has made some people winners and others losers. b) Globalization has been good for everyone involved. c) Globalization has been bad for everyone...
-
Web Activity: How much were our imports, exports, and trade deficit during the last year? Go to www.bea.gov, click on Survey of Current Business at the left, then go to National Data, National Income...
-
The total of our current and capital accounts ______. a) will always be zero b) will always be negative c) will always be positive d) may be positive or negative
-
Which of the following people would most likely experience at least a year of poverty after her or his 20th birthday? a) a high school dropout b) a black person c) a white person d) a college dropout
-
Which of the following would best describe our trading relationship with China five years from now? a) Our trade deficit will be higher and we will be importing a higher proportion of low-skill...
-
Why will voluntary and informational approaches not lead to deep reductions in emissions?
-
DEPARTMENT DATA EMPLOYEE DATA EmployeeNumber FirstName Mary Rosalie Richard George Alan 3 4 5 7 8 9 855555ES 12 13 14 15 16 17 Create the database tables in SQL or ACCESS: 18 19 20 PROJECT DATA Ken...
-
Access the file PRODUCTION FUNCTION 2 in which Input is used as an independent variable to explain changes in Output. a. Graph the relationship with Output on the vertical axis. What do you observe?...
-
Selected transactions for D. Reyes, an interior decorator, in her first month of business, are as follows.Jan. 2 Invested $10,000 cash in business.3 Purchased used car for $4,000 cash for use in...
-
Data for D. Reyes, interior decorator, are presented in E2-2. Instructions Journalize the transactions using journal page J1. (You may omit explanations.)
-
Presented below is information related to Hanshew Real Estate Agency. Oct. 1 Pete Hanshew begins business as a real estate agent with a cash investment of $15,000. 2 Hires an administrative...
-
1. A Pringles chip can be thought of mathematically in two ways: a. You can consider it as a thin elliptic slice of potato dough that is afterwards molded and fried. If the slice can be represented...
-
How does the study of epigenetics contribute to our understanding of how environmental factors influence gene expression and phenotypic variation within populations over evolutionary time scales ?
-
The accounting records of Jamaican Importers, Incorporated, at January 1, 2024, included the following: Assets: Investment in IBM common shares Less: Fair value adjustment $ 1,395,000 (150,000) No...
Study smarter with the SolutionInn App