In a production process, the cost structure indicates 40+3Q as the extra cost as a result of manufacturing an additional unit of output; while the component of cost regardless of the amount of output produced is $18. Given that the demand function is Qp = 600 – 3P in which Q represents quantity while P refers to price, (i) Express the total revenue function (TR) and the total cost function (TC) with respect to Q. (ii) Express the profit function (II) in terms of Q. (iii) Determine the level of output when the production is at the break-even point. (iv) Determine the profit-maximizing level of output and price.

In a production process, the cost structure indicates 40+3Q as the extra cost as a result of manufacturing an additional unit of output; while the component of cost regardless of the amount of output produced is $18. Given that the demand function is Qp = 600 – 3P in which Q represents quantity while P refers to price, (i) Express the total revenue function (TR) and the total cost function (TC) with respect to Q. (ii) Express the profit function (II) in terms of Q. (iii) Determine the level of output when the production is at the break-even point. (iv) Determine the profit-maximizing level of output and price.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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