Suppose you are an economist working in a watch factory operating in a competitive market. The cost is given by: CT = 200 + Q2, where Q is the level of production and CT is the Total Cost, the CMg (marginal cost) of production is 2Q. The Fixed Cost of production is $ 150. a. If the price of the watches is $ 60. How many watches must they make to maximize profit? b. What would be the level of utility? c. At what minimum price would the company make a positive output?
Suppose you are an economist working in a watch factory operating in a competitive market. The cost is given by: CT = 200 + Q2, where Q is the level of production and CT is the Total Cost, the CMg (marginal cost) of production is 2Q. The Fixed Cost of production is $ 150. a. If the price of the watches is $ 60. How many watches must they make to maximize profit? b. What would be the level of utility? c. At what minimum price would the company make a positive output?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose you are an economist working in a watch factory operating in a competitive market. The cost is given by: CT = 200 + Q2, where Q is the level of production and CT is the Total Cost, the CMg (marginal cost) of production is 2Q. The Fixed Cost of production is $ 150.
a. If the price of the watches is $ 60. How many watches must they make to maximize profit?
b. What would be the level of utility?
c. At what minimum price would the company make a positive output?
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