3. Suppose that for a product in a competitive market the demand function is pfunction is p = 200 + 2x, where x is the number of units and p is in dollars. A firm's average cost function for thisproduct is C(x) == 1200 – 2x and the supply12000+ 50 + x. Find the maximụm profit. Sketch the graphs of the revenue, cost and profitfunctions on the same set of coordinate axes.(Hint: First find the equilibrium quantity and equilibrium price by equalizing the functions of supply and demand.)[P(x) = R(x) – C(x) = p· x – C(x) · x, where pequilibrium price.]

Given Demand function p = 1200-2x ....... (1) and supply function p = 200+2x…

3. Suppose that for a product in a competitive market the demand function is p = 1200 – 2x and the supply function is p = 200 + 2x, where x is the number of units and p is in dollars. A firm's average cost function for this 12000 product is Č(x) + 50 + x. Find the maximum profit. Sketch the graphs of the revenue, cost and profit functions on the same set of coordinate axes. (Hint: First find the equilibrium quantity and equilibrium price by equalizing the functions of supply and demand.) [P(x) = R(x) – C(x) = p · x – Č(x)•x,where p = %3D equilibrium price.]

3. Suppose that for a product in a competitive market the demand function is p = 1200 – 2x and the supply function is p = 200 + 2x, where x is the number of units and p is in dollars. A firm's average cost function for this 12000 product is Č(x) + 50 + x. Find the maximum profit. Sketch the graphs of the revenue, cost and profit functions on the same set of coordinate axes. (Hint: First find the equilibrium quantity and equilibrium price by equalizing the functions of supply and demand.) [P(x) = R(x) – C(x) = p · x – Č(x)•x,where p = %3D equilibrium price.]

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

3. Suppose that for a product in a competitive market the demand function is p
function is p = 200 + 2x, where x is the number of units and p is in dollars. A firm's average cost function for this
product is C(x) =
= 1200 – 2x and the supply
12000
+ 50 + x. Find the maximụm profit. Sketch the graphs of the revenue, cost and profit
functions on the same set of coordinate axes.
(Hint: First find the equilibrium quantity and equilibrium price by equalizing the functions of supply and demand.)
[P(x) = R(x) – C(x) = p· x – C(x) · x, where p
equilibrium price.]

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A bookstore owner can sell 26 magazines at a price of $1.38 per magazine. If the price is $1.10, he can sell 30 magazines. The total cost to purchase x magazines is C(x) = 0.65x+7.75 dollars. Step 1 of 3: Assuming the demand function is linear, find an equation for D(x). Do not round your answer.
1 1 Consider the following cost function: c(w₁, W₂, y) = (w₁ + w₂)¹ y² (a) Find the marginal cost function, the average cost function, the supply function, and the demand function for input 1. (b) Sketch the supply curve and the demand curve for input 1. (c) What is the effect of an increase in the price of input 2 on the supply curve and the demand curve for input 1? Illustrate your answer. Solution: (excluding graphs) 1 1 дс MC = = 2 (w² + w²₁) ³y ду 1 _c_ (w² +w² )*y² _ y AC = -=-=-=- y 1 Supply: p =MC ⇒p = 2(w₁ +w₂₁) ¹y 1 1 1 = (w₁² + w²) ³ y To get demand for input 1, we use Shephard's lemma: x₁ = Cw₁ (w, y) = 4 (w^² + w² ) ² (; w₁, ²³y²) = (w ² + w² ) ² (w,₁ ²,²)
is profit maximisation seen as local minimum or maximum? Is part (b) the correct way of doing first derivative? There is image of the questions, another image of the answers of part (a) and (b).
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Consider a competitive market where there are two types of firms, Type A and Type B, with total cost functions TC^(q) =1+2q + q² TC (g) = 6+2q + 3q? (a) Derive the short-run supply curve for each firm type (b) What is the short-run market supply, if there are 10 Type A firms, and 6 Type B firms? (c) What is total quantity produced when p=5? (d) How does your answer at (c) change if we consider long run supply rather than short run? Here, assume again that p=5 and that there are 10 Type A firms and 6 Type B firms.
Please help with g.
See image for question with sub-parts.
Please help with f.
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