THIS EXERCISE FOR MATHEMATICAL ECONOMIC : Question (4): Consider a firm, where there is competition, looking to maximize its profits and the market has determined that the equilibrium price, the price firms must charge consumers is $45 a unit. The firm has determined that to minimize its total cost of production, it must produce 3 (in millions) units of good x. The firm’s total cost function is:C(q)= q3+2q2+11q+2How much will the firm earn in total sales (revenues)?How much will the firm incur in total costs?What will be the firm’s total variable cost of production?What will be the firm’s total profits?What will be the average cost of production per unit of good x and what will be the average revenue per unit earned?Suppose that the market has repriced good x (per unit) to $38 and the firm will adjust its output to minimize its total cost of production to 2 (in millions).Can the firm continue to operate under this environment? Explain how you come to your conclusion.

The problem outlined is a scenario analysis for a firm operating in a competitive market aiming to…

Answered: Question (4): Consider a firm, where…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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THIS EXERCISE FOR MATHEMATICAL ECONOMIC :

Question (4): Consider a firm, where there is competition, looking to maximize its profits and the market has determined that the equilibrium price, the price firms must charge consumers is $45 a unit. The firm has determined that to minimize its total cost of production, it must produce 3 (in millions) units of good x. The firm’s total cost function is:

C(q)= q³+2q²+11q+2

How much will the firm earn in total sales (revenues)?
How much will the firm incur in total costs?
What will be the firm’s total variable cost of production?
What will be the firm’s total profits?
What will be the average cost of production per unit of good x and what will be the average revenue per unit earned?
Suppose that the market has repriced good x (per unit) to $38 and the firm will adjust its output to minimize its total cost of production to 2 (in millions).Can the firm continue to operate under this environment? Explain how you come to your conclusion.

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