The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: GH¢10 million for the landGH¢1/4 million per floorSpecialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized?2) The demand and total cost functions of a good are respectively andFind expressions for TR, (profit) , MR, and MC in terms of Q.Solve the equation and hence determine the value of Q which maximizes profit. Verify that, at the point of maximum profit, MR=MC. 3)A monopolistic producer of two goods, 1 and 2, has a joint total cost function where and denote the quantity of items of goods 1 and 2, respectively that are produced. If P1 and P2 denote the corresponding prices then the demand equations are Using the Lagrange multiplier approach, find the maximum profit if the firm is contracted to produce a total of 15 goods of either type. Estimate the new optimal profit if the production quota rises by 1 unit.4) When is average cost minimized?5) what is variable cost?

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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 cost of building an office complex, x floors high, in a prime location in Accra is made up of three components:

GH¢10 million for the land
GH¢¹/₄ million per floor
Specialized costs of GH¢10000x per floor.

How many floors should the office complex contain if the average cost per floor is to be minimized?

2) The demand and total cost functions of a good are respectively and

Find expressions for TR, (profit) , MR, and MC in terms of Q.

Solve the equation and hence determine the value of Q which maximizes profit. Verify that, at the point of maximum profit, MR=MC.

A monopolistic producer of two goods, 1 and 2, has a joint total cost function

where and denote the quantity of items of goods 1 and 2, respectively that are produced. If P₁ and P₂ denote the corresponding prices then the demand equations are

Using the Lagrange multiplier approach, find the maximum profit if the firm is contracted to produce a total of 15 goods of either type. Estimate the new optimal profit if the production quota rises by 1 unit.

4) When is average cost minimized?

5) what is variable cost?

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