Consider a profit-maximizing firm which is the only seller in a particular market. The firm's marketing research department has estimated the demand and marginal revenue for your firm's product, and these are described by the following equations: P = 100 -0.01Q and MR = 100 -0.02Q. Consider that the firm's cost structure is described by the following equations: MC = 40 +0.02Q and AVC = 40 +0.01Q. Furthermore, the firm's only fixed cost is the $24,000 lease payment it has for the fully furnished building it rents. (Question 5 of 5) Consider that a shock to the economy led to a decrease in the firm's variable cost (marginal cost and average variable cost are now lower at each level of output). As a result, the firm's new cost structure is defined by the equations: MC = 20+ 0.02Q and AVC = 20+ 0.01Q. The firm fully adjusts after the shock. What impact did the economic shock have in this market? As a result of the economic shock, the quantity traded is on consumers. Consumers face a market price that is the initial quantity traded, and the firm's profit is its initial profit. Additionally, the economic shock had the initial consumer surplus. the initial market price, and have a consumer surplus that is

Consider a profit-maximizing firm which is the only seller in a particular market. The firm's marketing research department has estimated the demand and marginal revenue for your firm's product, and these are described by the following equations: P = 100 -0.01Q and MR = 100 -0.02Q. Consider that the firm's cost structure is described by the following equations: MC = 40 +0.02Q and AVC = 40 +0.01Q. Furthermore, the firm's only fixed cost is the $24,000 lease payment it has for the fully furnished building it rents. (Question 5 of 5) Consider that a shock to the economy led to a decrease in the firm's variable cost (marginal cost and average variable cost are now lower at each level of output). As a result, the firm's new cost structure is defined by the equations: MC = 20+ 0.02Q and AVC = 20+ 0.01Q. The firm fully adjusts after the shock. What impact did the economic shock have in this market? As a result of the economic shock, the quantity traded is on consumers. Consumers face a market price that is the initial quantity traded, and the firm's profit is its initial profit. Additionally, the economic shock had the initial consumer surplus. the initial market price, and have a consumer surplus that is

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 5E

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Beta Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Beta hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is C = 20 + 2Q^2. a. What are the firm's fixed costs? b. What is the firm's marginal cost? Now suppose other firms in the market sell the product at a price of $10 c. How much should this firm charge for the product? d. What is the optimal level of output to maximize profits? e. How much profit will be earned? f. In the long run, should this firm continue to operate or shut down? Why? *Please show all work*
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Solve the following
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