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. What is the optimal number of cars to be washed in a month? Calculate also themaximum profit that Clean and Shine can get in a month. (5 points)

A car wash service 'Clean and Shine' is a small business operating in the short run in a perfectly…

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 local shoe has total costs of production given by the equation TC-125+10q+5q². The market demand for shoes is given by the equation QD-50- (1/5) *P. a) Write the equations showing the average total cost and average variable cost and average fixed cost, each as a function of q. b) What is the breakeven price and breakeven quantity for this firm in the short run? c) What is the shutdown price and shutdown quantity for this firm in the short run? d) If the market price of the output is $50, how many units will this firm produce? e) Given a market price of $50. how many firms are in this market?
Just for (d) I'd like to know how to compute the producer surplus. Thanks!
A linear revenue function is R = 86x. (Assume R is measured in dollars.) (a) What is the slope m? m = Let C(x) = 7x + 550 and R(x) = 28x. (a) Write the profit function P(x). P(x) = (b) What is the marginal revenue MR? MR = What does the marginal revenue mean? ○ Each additional unit sold yields this many dollars in revenue. ○ If the number of units sold is increased by this amount, the revenue decreases by $1. ◇ Each additional unit sold decreases the revenue by this many dollars. ◇ If the number of units sold is increased by this amount, the revenue increases by $1. (c) What is the revenue received from selling one more item if 50 are currently being sold? $ What is the revenue received from selling one more item if 100 are being sold? $ (b) What is the slope m of the profit function? m = (c) What is the marginal profit MP? MP = (d) Interpret the marginal profit. ○ Each additional unit sold increases the profit by this much. ○ This is the smallest number of units that can be sold in…
18) An appliance company determines that in order to sell x dishwashers, the price per dishwasher must be p=660-0.4x. It also determines that the total cost of producing x dishwashers is given by C(x) = 5000+ 0.6x². What is the maximum profit? A) $103,900 B) $108,900 C) $113,900 D) $212,800
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?
Given the following functions for shoe factory in Ohio: fi: Qa=2(90-P) 1 P==Qs 4 Where Q is quantity and P is price. fz given is the Marginal Cost for the shoe factory but this producer often dumps left over materials such as glues and dyes directly into the sewer effecting ground water in the nearby town. An expert in the field discovered that the marginal damage is a constant $9. 1. What is the social marginal cost (show all working)? 2. What is the new equilibrium when pollution damage is taken into consideration for this market? 3. What is the total surplus when accounting for the damages? (Evaluate at the SMC level) - Draw the diagram and label. 4. What is the Deadweight loss for the pollution in the event that the producers do not pay for the damages? (Identify the DWL on your diagram) 5. What is the Total Social Surplus taking damages into account?
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.
Rent of a factory is the fixed cost for the firm True/False
Consider the following total revenue function for a hammer. R 44x 0.01x2 (a) The sale of how many hammers, x, will maximize the total revenue in dollars? x = 2200 hammers Find the maximum revenue. $48400 (b) Find the maximum revenue if production is limited to at most 1200 hammers. $ If the total revenue function for a computer is R(x) = 1000x - 35x2-x³, find the level of sales, x, that maximizes revenue and find the maximum revenue in dollars. x = R(x) = $ computers If the total cost function for producing x lamps is C(x) = 3240 + 37x+ 0.9x2 dollars, producing how many units, x, will result in a minimum average cost per unit? units Find the minimum average cost per unit. $ If the total cost function for a product is C(x) = 10+ 0.1x2 dollars, producing how many units, x, will result in a minimum average cost per unit? x= units Find the minimum average cost per unit. $ Find the derivative of the function. f(x) = ex-xe
Suppose you make beautiful coffee tables out of juniper trees. Your materials cost for each table is $135. You pay your craftsman $25 per hour and it takes him 5 hours to complete one table. If you sell these tables for $689, what is your Cost of Goods Sold Percentage? 2. What is the Gross Profit Margin on the coffee tables described in question 1 above? 3. Suppose your company sells a 3 pack of lenses that attach to smart phones to improve the quality of pictures people take. You pay $29.95 for each 3 pack and sell them for $59.95. What is your Cost of Goods Sold Percentage for this item? 4. Suppose you sell 8,000 of the 3 pack of lenses described in question 3 above in one year. You cost on each 3 pack is $29.95 and you sell them for $59.95. If your operating expenses for the year total $144,080, what are your Net Income and Net Profit Margin Percentage? 5. Suppose an investor gave you $150,000 to start your business. You gave this investor 50 percent of your company for…
Assume TC = 400 + 2Q3 What is the marginal cost at the 4th unit? Enter as a value.
A firm has the following information on production and costs from past data: Output (Y) 0 12 18 6 Total Cost (TC) 9 2775 5361 8199 If the total cost function is known to be TC = aY' + bY ² + kY + ƒ , and the demand for the product of the firm is Y = 320-(1/2). P answer the following: • Determine the coefficients of the cubic cost function. • Derive all cost and revenue curves and the profit function. Show that the MC cuts the AVC when AVC is at its minimum point. Plot the relevant graph indicating all points. Calculate the break even and profit maximizing levels of output and price. • What is the relationship between price, marginal revenue and own price elasticity of demand at the profit maximization point.

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