Suppose that you estimate the following cost function for your company, v operating in a monopolistically competitive market: TC = 240Q – 12Q² + 0.2Q³ You also estimate the following demand curve for the output you are produ P = 180 – 6Q Derive the equations for average cost and marginal cost curyes

Suppose that you estimate the following cost function for your company, v operating in a monopolistically competitive market: TC = 240Q – 12Q² + 0.2Q³ You also estimate the following demand curve for the output you are produ P = 180 – 6Q Derive the equations for average cost and marginal cost curyes

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The graph below plots the firm's total revenue curve: that is, the relationship between quantity and total revenue given by the two right columns in the table above. The five choices are also labeled. Finally, two black lines are shown; these lines are tangent to the green curve at points B and D. 90 81 72 63 54 В D 45 36 27 18 A E 100 200 300 400 500 600 700 800 QUANTITY (Dishwashers per year) TOTAL REVENUE (Thousands of dollars per year)
On the graph input tool, change the number found in the Quantity Demanded field to determine the prices that correspond to the production of 0, 6, 12, 15, 18, 24, and 30 units of output. Calculate the total revenue for each of these production levels. Then, on the following graph, use the green points (triangle symbol) to plot the results. Calculate the total revenue if the firm produces 6 versus 5 units. Then, calculate the marginal revenue of the sixth unit produced. The marginal revenue of the sixth unit produced is________. Calculate the total revenue if the firm produces 12 versus 11 units. Then, calculate the marginal revenue of the 12th unit produced. The marginal revenue of the 12th unit produced is_________.
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