4. Assess which of the following is true and which is false. A firm’s profit equation is given by π = -100 + 160Q – 20Q2 . Therefore, a) The firm’s fixed cost is 100. b) The firm’s fixed cost is 40 and variable cost is 20. c) Marginal profit is Mπ = 160 – 20Q. d) The firm’s profit-maximizing output is Q = 4. e) Marginal profit is Mπ = 160 – 40Q and it is positive for quantities that are lower than the profit-maximizing quantity.
4. Assess which of the following is true and which is false. A firm’s profit equation is given by π = -100 + 160Q – 20Q2 . Therefore, a) The firm’s fixed cost is 100. b) The firm’s fixed cost is 40 and variable cost is 20. c) Marginal profit is Mπ = 160 – 20Q. d) The firm’s profit-maximizing output is Q = 4. e) Marginal profit is Mπ = 160 – 40Q and it is positive for quantities that are lower than the profit-maximizing quantity.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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4. Assess which of the following is true and which is false.
A firm’s profit equation is given by π = -100 + 160Q – 20Q2
. Therefore,
a) The firm’s fixed cost is 100.
b) The firm’s fixed cost is 40 and variable cost is 20.
c) Marginal profit is Mπ = 160 – 20Q.
d) The firm’s profit-maximizing output is Q = 4.
e) Marginal profit is Mπ = 160 – 40Q and it is positive for quantities that are lower than the
profit-maximizing quantity.
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