Demand and Supply equations of a particular market are as follows. Qd = 2100 – 7P Qs = – 1200 + 5P Where, Qd is the quantity demanded, Qs is the quantity supplied and P is the market price. By all means, this market is considered as a perfectly competitive market. The average cost information of a selected firm in this market is given below. AFC = 450/Q AVC = (155Q + 2Q2)/Q a) Calculate the profit maximizing output level of the firm based on Marginal approach. b) Calculate the profit (in Rupees) at the profit maximizing output level.

Demand and Supply equations of a particular market are as follows. Qd = 2100 – 7P Qs = – 1200 + 5P Where, Qd is the quantity demanded, Qs is the quantity supplied and P is the market price. By all means, this market is considered as a perfectly competitive market. The average cost information of a selected firm in this market is given below. AFC = 450/Q AVC = (155Q + 2Q2)/Q a) Calculate the profit maximizing output level of the firm based on Marginal approach. b) Calculate the profit (in Rupees) at the profit maximizing output level.

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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