Question: The cost function for Acme Laundry is C( q) = 10 + 10q + q2, so its marginal cost function is MC = 10 +

The cost function for Acme Laundry is C( q) = 10 + 10q + q2, so its marginal cost function is MC = 10 + 2q, where q is tons of laundry cleaned. Derive the firm’s average cost and average variable cost curves. What q should the firm choose so as to maximize its profit if the market price is p? How much does it produce if the competitive market price is p = 50?

Step by Step Solution

★★★★★

3.43 Rating (166 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The firms profit is pq 10 10 q q 2 To find the profitmaximizing outpu... View full answer

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

349-B-E-M-E (3130).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

The cost function for Acme Laundry is C(q) = 10 + 10q + q 2 , where q is tons of laundry cleaned. What q should the firm choose to maximize its profit if the market price is p? How much does it...

What is the Apache Web server? How much does it cost? What functional ity does it currently have? You may want to look at Wikipedia to answer this question.

Why can using a firm's working capital to discuss cash flow without further qualification be misleading? Should the methods of cash flow analysis distinguish between a new capital intensive business...

3.4 The cost function for Acme Laundry is C(q) = 10 + 10q + q2, so its marginal cost function is MC = 10 + 2q, where q is tons of laundry cleaned. Derive the firms average cost and average variable...

The cost function for Acme Laundry is C(q) = 10 + 10q + q 2 , so its marginal cost function is MC = 10 + 2q, where q is tons of laundry cleaned. Derive the firm's average cost and average variable...

*2.5 The cost function for Acme Laundry is C(q) = 10 + 10q +q , so its marginal cost function is MC = 10 + 2q, where q is tons of laundry cleaned. Derive the firm's average cost and average variable...

Suppose a chemical company is in a perfectly competitive industry and has a short run total cost curve of TC = 1/3q 3 + 5q 2 + 10q + 10 and a short run marginal cost of SMC = q 2 + 10q + 10. At the...

Chap9 1Suppose there are 100 firms each with a short run total cost of STC = q 2 + q + 10, so that marginal cost is MC = 2q +1. The market supply curve is a. Q S = 50 + 50P b. Q S =-1/2+1/2p c. Q S =...

Hi there, please answer these questions with full working out. Thanks Q1) If the pre-tax cost function for John's Shoe Repair is C(q) = 100 + 10q - q 2 + 1/3q 3 , and it faces a specific tax of t =...

If the cost function for Johns shoe Repair is C(q) = 100 + 10q q2 + 3 , and its marginal cost function is MC = 10 2q + q2, what is its profit-maximizing condition given that the market price is p?

Here is the proprietary fund transactions and statements to be completed. As of July 1, 2016, the City of Saratoga Springs decided to purchase a privately operated swimming pool and to create a...

An investment costs $1,548 and pays $138 in perpetuity. If the interest rate is 9%, what is the NPV?

2 x 3 4 + x 2 + x 3 d x

Assume that X~ , (0, )(p=2), where I is known, and that it is desired to estimate under a quadratic loss. Consider the estimator (x) = (1+(x'Cx)-1A), (8.37)where C is positive definite. Show that...

Now suppose that the owner of Topside Tiles in the previous question changes the managers compensation to a fixed share (15%) of profit: Y = 0.15. The situation is otherwise the same as in Question...

Many hospitals have regularly scheduled surgery and active emergency departments. Based on the information in the Mini-Case Medical Economies of Scope, could it be more cost effective to have...

In the Mini-Case Solar Power Learning Curves, the cost of solar power installations fell as the installed base (cumulative experience) in a given country rose. If N represents cumulative national...

Suppose you are 45 years old this year and plan to retire 15 years from now. You have just signed a contract to put a certain amount of annual contributions into the EYF retirement plan. It is...

Please give formulas and explain how you got the answer, thanks! E12-21A (similar to) Question Help Caruso Hardware is adding a new product line that will require an investment of $1,418,000....

Given an array, arr, of distinct elements and two numbers a and b, write a function void findMissing(int arr[], int n, int a, int b ), which finds and sorts all numbers that are in the range between...