The marginal profit for a certain company is MP₁(x)= x² + 18x-45. The company expects the daily production level to rise from x = 3 to x = 5 units. The management is considering a plan that would have the effect of changing the marginal profit to MP₂(x) = -x² +14x-33. Should the company adopt the plan? Determine the area between the graphs of the two marginal profit functions from x = 3 to x = 5. Interpret this area in economic terms. Should the company adopt the plan that would make the marginal profit be MP₂? OA. Yes, because the company will make a larger profit under the new plan. B. No, because the company's profit will be smaller under the new plan. OC. It is impossible to tell using the given information. The area between the graphs of the two marginal profit functions from x = 3 to x = 5 is sq. units.

The marginal profit for a certain company is MP₁(x)= x² + 18x-45. The company expects the daily production level to rise from x = 3 to x = 5 units. The management is considering a plan that would have the effect of changing the marginal profit to MP₂(x) = -x² +14x-33. Should the company adopt the plan? Determine the area between the graphs of the two marginal profit functions from x = 3 to x = 5. Interpret this area in economic terms. Should the company adopt the plan that would make the marginal profit be MP₂? OA. Yes, because the company will make a larger profit under the new plan. B. No, because the company's profit will be smaller under the new plan. OC. It is impossible to tell using the given information. The area between the graphs of the two marginal profit functions from x = 3 to x = 5 is sq. units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) NOTE: the options for the blank question is this Suppose Ike's Bikes is expecting to produce 500 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using _______ (once factory OR two factory OR three factory)
a) Given that a firm has a production technology, y= (X² + X²)², derive the MRTS12
The Cobb-Douglas production function for a particular product is N(x,y) = 40x0.6.0.4, where x is the number of units of labor and y is the number of units of capital required to produce N(x, y) units of the product. Each unit of labor costs $40 and each unit of capital costs $120. Answer the questions (A) and (B) below. (A) If $300,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maximum production. (B) Find the marginal productivity of money in this case, and estimate the increase in production if an additional $50,000 is budgeted for the production of the product. (A) If $300,000 is budgeted for production of the product, determine how that amount should be allocated to maximize production, and find the maximum production. Production will be maximized when using units of labor and units of capital.
A small company produces organic cookies. When the price is $6 per dozen, the average daily sales has been 72 dozen cookies. When the price was decreased to $3 per dozen, the average daily sales increased to 110 dozen cookies. Assume that daily cookie sales is linearly related to price per dozen. Each dozen cookies has a variable cost of 87 cents to make, plus additional daily fixed costs of $84. Find a function that models the daily profit in terms of the sales x in dozens of cookies.
A bookstore owner can sell 26 magazines at a price of $1.38 per magazine. If the price is $1.10, he can sell 30 magazines. The total cost to purchase x magazines is C(x) = 0.65x+7.75 dollars. Step 1 of 3: Assuming the demand function is linear, find an equation for D(x). Do not round your answer.
Suppose that for a company manufacturing calculators, the cost, revenue, and profit equations are given by x² C = 70,000 + 30x, R=200x - A) Costs are increasing at the rate of $ (Simplify your answer.) where the production output in 1 week is x calculators. If production is increasing at a rate of 600 calculators per week when production output is 5,000 calculators. Find the rate of increase (decrease) in cost, revenue, and profit. B) Revenue is decreasing at the rate of $ (Simplify your answer.) C) Profits are (Simplify your answer.) 20 at the rate of $ P=R-C per week at this production level. per week at this production level. per week at this production level.
A street musician bought a new fiddle for $850.00. Assume she breaks 1 string each hour and can buy new strings for $1.00 each. On average, she makes $18.00 per hour. (a) Find the cost function C(x) associated with playing the fiddle for x hours. C(x)= (b) Find the revenue function R(x) for the amount of revenue gained from x hours of playing R(x) = (c) Find the profit function P(x) for the amount of profit gained from x hours of playing P(x) = (d) Use the functions above to complete the following sentence. She will need to work hours to break even
is profit maximisation seen as local minimum or maximum? Is part (b) the correct way of doing first derivative? There is image of the questions, another image of the answers of part (a) and (b).
Suppose the input combination currently used by a producer is such that the TRS is equal (in absolute value) to the ratio of the input prices. Then, we can conclude that the producer is maximizing her profits. Group of answer choices True False
To produce the next popular toy, a company has to pay a factory $250, 000 to set up the production line. They also have to pay $25 per item for the raw materials and labor. Write function for the average cost to produce x items. Then describe what happens to the average cost as the factory produces a large number of toys.
A firm has the production function f(X, Y) = x²/2 y1/2, where X is the amount of factor x used and Y is the amount of factor y used. On a diagram we put X on the horizontal axis and Y on the vertical axis. We draw some isoquants. Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of -3. The straight line we drew Select one: O a. is vertical. b. is horizontal. c. is a ray through the origin with slope 3. d. is a ray through the origin with slope 4. O e. has a negative slope.
The demand function for a certain product is determined by the fact that the product of the price and the quantity demanded equals 8000. The product currently sells for $2.20 per unit. Suppose manufacturing costs are increasing over time at a rate of 18% and the company plans to increase the price p at this rate as well. Find the rate of change of demand over time. Find the demand function represented in this problem where p is the price of the product and q is the quantity demanded for the product. (Type an equation.)