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Question 3 (5 points): A firm producing widgets has $2000 fixed costs (e.g., rent) and $20 per- unit costs (i.e., it costs $20 to produce each additional widget). The demand function is given by 5000-50P, Q(P) 6500-100P, 0 ≤ P ≤30 30 < P≤ 65 P > 65 where P is the price of widgets and Q(P) is the amount the firm can sell as a function of price. a) (2 points) What will be the firm's profit if it sets the price P = $40 and produces as much as it can sell? b) (3 points) What will be the firm's profit if it decides to produce and sell 3600 widgets?

Question 3 (5 points): A firm producing widgets has $2000 fixed costs (e.g., rent) and $20 per- unit costs (i.e., it costs $20 to produce each additional widget). The demand function is given by 5000-50P, Q(P) 6500-100P, 0 ≤ P ≤30 30 < P≤ 65 P > 65 where P is the price of widgets and Q(P) is the amount the firm can sell as a function of price. a) (2 points) What will be the firm's profit if it sets the price P = $40 and produces as much as it can sell? b) (3 points) What will be the firm's profit if it decides to produce and sell 3600 widgets?

ENGR.ECONOMIC ANALYSIS
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 3 (5 points): A firm producing widgets has $2000 fixed costs (e.g., rent) and $20 per- unit costs (i.e., it costs $20 to produce each additional widget). The demand function is given by 5000-50P, Q(P) 6500-100P, 0 ≤ P ≤30 30 < P≤ 65 P > 65 where P is the price of widgets and Q(P) is the amount the firm can sell as a function of price. a) (2 points) What will be the firm's profit if it sets the price P = $40 and produces as much as it can sell? b) (3 points) What will be the firm's profit if it decides to produce and sell 3600 widgets?
Transcribed Image Text:Question 3 (5 points): A firm producing widgets has $2000 fixed costs (e.g., rent) and $20 per- unit costs (i.e., it costs $20 to produce each additional widget). The demand function is given by 5000-50P, Q(P) 6500-100P, 0 ≤ P ≤30 30 < P≤ 65 P > 65 where P is the price of widgets and Q(P) is the amount the firm can sell as a function of price. a) (2 points) What will be the firm's profit if it sets the price P = $40 and produces as much as it can sell? b) (3 points) What will be the firm's profit if it decides to produce and sell 3600 widgets?
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