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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A typical firm in industry X has the following total cost function: TC = 400 + 20*q + 0.25*q2, where q represents the units of output. (a) What is the marginal cost at output level q=34? (Round to one decimal place.) (b) What is the average cost at output level q=34? (Round to one decimal place.) (c) At this level of output (q=34) the firm faces (economies or diseconomies) of scale?
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.
Suppose an avocado farm has cost C=0004g- 28g 1250 (ahere g is measured in bunches) The market price per bushel of avocados is $28 In the short run, thig firm's profit is N (Round your response to the nearest penny)
Rent of a factory is the fixed cost for the firm True/False
Jack's car repair factory has the Total Cost function: TC(Q)=3.30³-540 + 8 where Q stands for the number of hours of repairs. If the market price for car repair is $100 per hour, what are the optimal hours of repairs that Jack will do (round to 2 decimal places)?
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
p=D(x)=71.5−0.02xp=D(x)=71.5−0.02x dollars. The total cost for these coffee makers is given by C(x)=0.05x2+5.5x+6200C(x)=0.05x2+5.5x+6200 dollars. Determine the marginal profit for 118 coffee makers.
It is known that the firm's fixed costs = 55. The marginal cost function has the form: MC = 22-8Q + 3Q2 + 2Q3. Determine the function of the total costs of the company (TC) and calculate these costs for the release of 3 units of production.
3) A firm produces 50 000 boxes in one month and market price of these shoes is 10 TL per box. The total cost of the firm 400 000 TL and 20% of that cost is variable cost. Given that information a) Calculate the profit, ATC, AFC and AVC of that firm b) Suppose that market price is up to 11. The firm considers to increase its output to 55 000 when the price is 11 which however will lead to a total cost of 480 000. Should this firm increase its output and if so, why?
The HAC at Humberview has decided to sell Gatorade to raise money. The demand function is described by px=-4x+340 , where x is the number of bottles, in hundreds, and px is in dollars. The cost function, in dollars, is described by Cx=300x-275. Determine the number of Gatorade bottles they must sell so that they maximize their profit.
A farm produces rice, which is sold in 50 kilogram bags. Let Q denote the number of bagsproduced per week during harvest time. Costs C are denoted in units of dollars. The totalweekly cost function for producing the product is C = 4Q + 100. The total weekly income function for this product is I = 50Q – 2Q2. What is the profit function P as a function of Q and sketch it using P values 0, 5, 10,15, 20 and 25.
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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