A firm has the following information on productionQ.6and costs from past data:OutputTotal Cost (ТC)(Y)6.12189.277553618199IfthetotalfunctionisknowncosttobeТС - аY + br+kY+ f. and the demand for the%3Dproduct of the firm is Y = 320- (1/2). P answer thefollowing:Determine the coefticients of the cubic cost function.Derive all cost and revenue curves and the profitfunction.Show that the MC cuts the AVC when AVC is at itsminimum point. Plot the relevant graph indicating allpoints.Calculate the break even and profit maximizing levels ofoulput and price.What is the relationship between price, marginal revenueand own price elasticity of demand atmaximization point.the profit

The total cost function is an aggregate function of total fixed cost and total variable cost where…

A firm has the following information on production Q.6 and costs from past data: Output Total Cost (TC) (Y) 6. 12 18 2775 5361 8199 If the total function is known cost to be TC = aY'+ bY² + k¥ + f. 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

A firm has the following information on production Q.6 and costs from past data: Output Total Cost (TC) (Y) 6. 12 18 2775 5361 8199 If the total function is known cost to be TC = aY'+ bY² + k¥ + f. 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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A firm has the following information on production
Q.6
and costs from past data:
Output
Total Cost (ТC)
(Y)
6.
12
18
9.
2775
5361
8199
If
the
total
function
is
known
cost
to
be
ТС - аY + br+kY+ f. and the demand for the
%3D
product of the firm is Y = 320- (1/2). P answer the
following:
Determine the coefticients 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
oulput and price.
What is the relationship between price, marginal revenue
and own price elasticity of demand at
maximization point.
the profit

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Suppose a firm has the following production function Q = f(K,L) = (1/2)L(2/3)K(1/3) and a total cost function TC = wL + rK The rental cost of capital is 2 euros per hour and the labor wage is 4 euros per hour. Suppose also that in the short-run, the firm uses 8 machines in the production process. (a) Show that the firm’s short-run average cost (SRAC) is SRACK=8 = (16/Q)+ 4√? (b) Draw the SRAC curve(c) By solving the first order conditions that the global minimum of production is 4(d) Show that the firm’s long-run average cost (LRAC) is 12. Hint: Start by obtaining the firm’s long-run expansion path(e) Draw both the SRAC and the LRAC and explain why the SRAC is always equal or above the LRAC.
Suppose a firm’s cost function is given by: C= 50 + 4q2 a) Find the equations for AFC, AVC and MC. b) If w=$4, what’s the short run production function for this firm?
The manager of Greene Enterprises, Inc., recently estimated its average variable cost (AVC) function to be AVC = 88−0.026Q + 0.000003Q2 Greene Enterprises faces total fixed costs (TFC) of $300,000. At what level of output does average variable cost (AVC) reach its minimum value for Greene Enterprises?
Consider the following cost function: 3 C=0.2q³-6q² + 80q + 150. (Enter a numeric response using a real number rounded to two decimal places.) When output is 19 units, average cost is $ When output is 19 units, marginal cost is $ The output level where average variable cost equals marginal cost is units.
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Note: Enter your answer withtout the dollar sign ($) For the cost function TC= 520 + 10Q + 5Q2, determine the average fixed cost of producing 5 units of output.
In the short run, a firm which has production function f(L, M) = 4L1/2M1/2 must use 4 machines. If the cost of labor is £4 per unit and the cost of machines is £4 per unit, what is the short-run total cost of producing 48 units of output? Use Lagrange
An economist estimated that the cost function of a single-product firm isC(Q) = 100 + 20Q + 15 Q^2 + 10 Q^3Based on this information, determine:b. The variable cost of producing 10 units of output.
Consider the following multiple output cost function: C(Q1, Q₂) = 100+ 0.5Q₁Q2 + (Q₁)² + (Q₂)² Suppose Q₁ = Q₂ = 10 units. What is 100 in the above equation? a b FC C VC a Are there economies of scope when Q₁ Q₂ = 10 units? = AFC с Yes b No There are cost complementaries.
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.