(a) Teddy J is a manufacturer of dish washing liquid . If his monthly demand function for 750mlsize is q = 4000 − 250p and his total cost function is C(q) = 500 + 0.2q. (iv) How many 750ml bottles of dish washing liquid should Teddy J produceper month if he wishes to maximize his profits.(b) A firm has an average cost function125 q?A(q)+4.16where q is the firm's output.(1) Determine the level of output for average costs are minimum.(ii) Hence determine the range of values for which average costs are decreasing.

Profit maximizing quantity is when marginal revenue MR = Marginal cost MC. To find the quantity…

Answered: (iv) How many 750ml bottles of dish…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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(a) Teddy J is a manufacturer of dish washing liquid . If his monthly demand function for 750ml
size is q = 4000 − 250p and his total cost function is C(q) = 500 + 0.2q.

(iv) How many 750ml bottles of dish washing liquid should Teddy J produce
per month if he wishes to maximize his profits.
(b) A firm has an average cost function
125 q?
A(q)
+
4.
16
where q is the firm's output.
(1) Determine the level of output for average costs are minimum.
(ii) Hence determine the range of values for which average costs are decreasing.

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