A firm's short run total cost function is TC=0.75q² +8q + 300 The firm is monopolist and the inverse demand function for the product is p=201-2q a. Find the most profitable level of output and the profits at that output. b. When maximising profit, does the firm produce at minimum average cost? c. Find the breakeven points. d. Sketch the graphs of the inverse demand, marginal revenue and marginal cost functions with the same axes. e. Sketch the graphs of total cost and total revenue with the same axes. Sketch the graph of the profit function. Show the break-even points on both graphs.

A firm's short run total cost function is TC=0.75q² +8q + 300 The firm is monopolist and the inverse demand function for the product is p=201-2q a. Find the most profitable level of output and the profits at that output. b. When maximising profit, does the firm produce at minimum average cost? c. Find the breakeven points. d. Sketch the graphs of the inverse demand, marginal revenue and marginal cost functions with the same axes. e. Sketch the graphs of total cost and total revenue with the same axes. Sketch the graph of the profit function. Show the break-even points on both graphs.

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's short run total cost function is
TC=0.75q² +8q+300
The firm is monopolist and the inverse demand function for the product is p=201-2q
a. Find the most profitable level of output and the profits at that output.
b. When maximising profit, does the firm produce at minimum average cost?
c. Find the breakeven points.
d. Sketch the graphs of the inverse demand, marginal revenue and marginal cost functions with the
same axes.
e. Sketch the graphs of total cost and total revenue with the same axes. Sketch the graph of the profit
function. Show the break-even points on both graphs.

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