A car wash service 'Clean and Shine' is a small business operating in the short run in aperfectly competitive market. The business has to pay for electricity and water as much asIDR200 thousand a month, whereas its variable cost (VC) is expressed as a function of thenumber of cars washed (q):VC(q) = 5q + 0,1q² (in thousands of rupiah)Currently the price of car wash services is IDR35 thousand/car. Draw the average variable cost (AVC) curve and the marginal cost marginal (MC)curve of Clean and Shine business in one diagram. (5 points)At what minimum price is Clean and Shine willing to provide its services?Calculate, then show and explain the Clean and Shine supply curve from theprevious diagram (at poin (i)). (5 points)

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Answered: A car wash service 'Clean and Shine' is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The total revenue function for a product is given by R=655x dollars, and the total cost function for this same product is given by C=19,250+70x+x2, where C is measured in dollars. For both functions, the input x is the number of units produced and sold. a. Form the profit function for this product from the two given functions. b. What is the profit when 25 units are produced and sold? c. What is the profit when 43 units are produced and sold?
In the market for foam fire retardant there is only one firm. The demand func-tion for the product is Q = 15,000 – 10P where Q is the annual sales quantity in tons and P is the price per ton. The firm’s total cost function (in dollars) is C = 1,400,000 + 300Q + 0.05Q2.a) How much foam fire retardant should this firm produce and sell in order to maximize its profit? What price should it charge?b) Compute the firm’s total profit.c) Suppose now that the firm faces a 20% increase in variable costs. Determine what impact this will have on the firm’s optimal choice.
Эшestion 1 A computer retailing company specializes in the sale of jump drives to community college tudents. The demand function for jump drives is p=2x+10x+1000 dollars For the samne company the average cost function is given as: ē = 2x +36x-1600- 20 * dollars Where p is the price in dollars and x represents units of output. 1) i1) Find the price and output that will maximize profit. Find the maximum profit
A typical firm in industry X has the following total cost function: TC = 400 + 38*q + 0.5*q2, where q represents the units of output. • This firm is producing 35 units of output and the firm's MC(q=35) = $73 and AC(q=35) = $66.9. (a) At this level of output, the firm's AC(q) function is in output (q). (Enter just one word: increasing or decreasing). (b) The firm faces of scale. (Enter just one word: economies or diseconomies.).
The marginal cost of producing the xth box of light bulbs is 4 + x2 dollars per box. Determine how much is added to the total cost by a change in production from x = 20 to x = 80 boxes. 1,000
a) Calculate the marginal product (MP1) for the mixers. Does the production function have increasing, decreasing, constant marginal product for the mixers? b) Suppose in the short run the amount of machines she has is fixed at 27. How many mixers should she use? How many baklavas will she produce? How much profit will she make? c)Usinag an isoprofit, as well as the production function, draw a diagram of your soltuion from part (b). carefully label all the slopes and intercepts. d) In the long run, how many mixers should she use? How many machines? How many baklavas will she make? e) Suppose that the government decides to provide a $1 subsidy per mixer. What is the profit-maximizing amount of input to use now?
The long-run cost function for a firm in the personal computer business is: C(q) = 8q² + 7200, for q> 0. What is the average cost function AC (g)? AC (q) = 16q AC (q) = 8q+ 7200 9 AC (q) = 16q+ AC (g) 16q+7200 AC(q) = 8q+7200 = 7200 9 The long-run cost function for a firm in the personal computer business is: C(q) = 8q² + 7200. for q> 0. What is the marginal cost function MC (q)? MC(q) = 8q+7200 MC(q) = 8q MC (g) MC (q) = 16q MC (q) = 16q+ 16q+72000 7200 The long-run cost function for a firm in the personal computer business is: C(q) = 8q²+7200, for q> 0. At what level of output does average cost equal marginal cost? The level of output at which average cost and marginal cost are equal is type your answer... -01
A firm's total variable cost increases from $4,000 to $4,020 as the firm increases its output from 400 to 401 units. What is the marginal cost of producing the 401st unit? MultipleChoice a)$10 b)$4,000 c)$20 d)$4,020
10 ATC ATC2 ATC3 ATC, 2 2 4 6 8 10 Quantity (thousands of copies per day) A copy shop is choosing between four different operational sizes (ie, plant size). The average total cost curve for each option is shown in the graph. If the market demand for copies is 12,000 copies per day, how many copy shops would you expect to see in this market? The answer depends on the price of a copy, which is unknown. O 1 (because the copy shop will become a monopoly with a large quantity demanded) O (because the copy shop can't produce 12,000 copies efficiently and will shutdown) 3 (with each shop supplying 4000 copies per day) 8, 6 Average cost (cents per copy)

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