Here is the following information about the production of single factory Total revenue function: TR= 400Q -0.02Q² Total cost function: TC = 40,000 + 40Q+0.04Q² Minimum AC = -40,000Q² +0.04 = 0 a) Calculate the profit maximizing level of output and price for one plant and the profit b) Find the profit maximizing level of output When the business were to switch to a multi-plant operation taking advantage of minimum average cost. How many plants would this multi-

Here is the following information about the production of single factory Total revenue function: TR= 400Q -0.02Q² Total cost function: TC = 40,000 + 40Q+0.04Q² Minimum AC = -40,000Q² +0.04 = 0 a) Calculate the profit maximizing level of output and price for one plant and the profit b) Find the profit maximizing level of output When the business were to switch to a multi-plant operation taking advantage of minimum average cost. How many plants would this multi-

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

Here is the following information about the production of single factory
Total revenue function: TR=400Q -0.02Q²
Total cost function: TC = 40,000 + 40Q + 0.04Q²
Minimum AC = -40,000Q² +0.04 = 0
b)
a) Calculate the profit maximizing level of output and price for one plant and the profit
Find the profit maximizing level of output When the business were to switch to a multi-plant
operation taking advantage of minimum average cost. How many plants would this multi-
plant operation involve? Show all workings.
c)
Find the level of profit for the multi-plant operation.|
d)
Should this operation operate as a multi-plant operation or a single plant operation?

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