ASKING FIRST TWO:a. State total profit equation and marginal profit for trucks:b. Determine output (Q) to maximize profit for selling Q quantity of trucks. Calculate total profit. 3. Swedish Automobiles Are the Best (SAAB) sells two types of vehicles: a truck and a car.The monthly inverse demand or price equation for trucks is estimated as P = 65 -0.05Q(where Qt is the number of trucks sold and Pt is the price per truck in thousands). For cars is:Pe=55-0.1Qc. It costs SAAB $27 (thousand) to produce each additional truck and $21(thousand) to produce each additional car, so MC. = 27 and MCc = 21. Assume no fixedcost so TC = MC X Q.●..State the total profit equation AND marginal profit for trucks:Determine the profit-maximizing output for trucks (Q) and compute the total profit thatSAAB will earn from selling this quantity of trucks:State the total profit equation AND marginal profit for cars:Determine the profit-maximizing output for cars (Qc) and compute the total profit thatSAAB will earn from selling this quantity of cars:

(a) Explain the overall profit calculation for trucks:Profit (π) is determined as the difference…

Answered: ASKING FIRST TWO: a. State total profit…

ASKING FIRST TWO: a. State total profit equation and marginal profit for trucks: b. Determine output (Q) to maximize profit for selling Q quantity of trucks. Calculate total 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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Concept explainers

Profit Maximization

Economic activity is related to the use of scarce resources of the economy that are used for producing goods and services which are required to satisfy various demands of the people. In other words, it can be said that it is all about satisfying the unlimited demands of individuals with the limited resources available. The production decision is taken by the producers or the firms. In economics, the terms ‘producers’, ‘suppliers’, and ‘firms’ are interchangeable. Now the question arises, what does a firm actually mean?

Question

ASKING FIRST TWO: a. State total profit equation and marginal profit for trucks: b. Determine output (Q) to maximize profit for selling Q quantity of trucks. Calculate total profit.

3. Swedish Automobiles Are the Best (SAAB) sells two types of vehicles: a truck and a car.
The monthly inverse demand or price equation for trucks is estimated as P = 65 -0.05Q
(where Qt is the number of trucks sold and Pt is the price per truck in thousands). For cars is:
Pe=55-0.1Qc. It costs SAAB $27 (thousand) to produce each additional truck and $21
(thousand) to produce each additional car, so MC. = 27 and MCc = 21. Assume no fixed
cost so TC = MC X Q.
●
.
.
State the total profit equation AND marginal profit for trucks:
Determine the profit-maximizing output for trucks (Q) and compute the total profit that
SAAB will earn from selling this quantity of trucks:
State the total profit equation AND marginal profit for cars:
Determine the profit-maximizing output for cars (Qc) and compute the total profit that
SAAB will earn from selling this quantity of cars:

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