(Use for Questions 1 - 3): The Burr Corporation's total cost function isTC 2004Q+2Q2МС - 4+40АС %3 200/Q + 4 +2Qwhere TC is the total cost in dollars, Q is quantity, MC is marginal cost per additional unit, AC is average cost per unit and P is product priceWhich rule should Burr Corp use to select a level of output that will maximize profit?а.*AC P-МC%3D0с.MC ACd.:МС - Р

The correct alternative for the aforementioned question is C.

Answered: (Use for Questions 1 - 3): The Burr…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Given the following profit function: T=-2Q^2+260Q-4500, Answer the following questions.
ii. A firms total cost functions for its two plants (both producing the same single product) are: C1 = 3q1? + 2q1+6 C2 = 2q2² + 2q2 + 4 where q1 and q½ are the outputs at the respective plants. The firms average revenue function is: AR = 74 – 6q where q = q1 + q2 and p is the price of the product. If profits are to be maximised: A. How much should be produced in each plant? Show these are profit maxima. B. What will profits be under these quantities?
D2)
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The Bowery Hotel is located on Third Street in Manhattan. Suppose the hotel has explicit costs of $200,000 per year and implicit costs of $50,000 per year. If the hotel earned an economic profit of $50,000 last year, the hotel's accounting profit equaled: $100,000. O $10,000. $50,000. O $200,000.
2
1- Use the total cost (TC) schedule that is presented in the table below to determine the optimal rate of production when the firm can sell all of the output it produces at a price of $10 per unit. Also determine the level of profit (or loss) that the firm will experience at this level of output. 1 2 3 4 5 7 8 TC $ 5 7 8 10 14 20 28 38 50 72
: The local government in Karachi is considering two tax proposals: A lump-sum tax of Rs. 300 on each producer of Ice-cream. A tax of Rs. 1 per unit of Ice-cream, paid by producers of Ice-cream. Which cost curves; average fixed cost, the average variable cost, average total cost, and marginal cost would shift as a result of the lump-sum tax? Why? Which cost curves; average fixed cost, the average variable cost, average total cost, and marginal cost would shift as a result of the per-unit tax? Why?
Answer fast...... Urgent
K-Electric's costs of production as follows: Quantity Q3. Total Fixed Costs Total Variable Costs Rs. 0 Rs. Rs.100 Rs.100 Rs. 100 Rs.100 Rs.100 Rs.100 Rs.100 50 Rs. 70 Rs. 90 Rs. 140 Rs. 200 Rs.360 3 4 a). Calculate K-Electric's average fixed costs, average variable costs, average total costs, and marginal costs at each level of production? b) The price of per unit electricity is Rs. 50. Secing the it can't make a profit, the Chief Executive Officer (CEO) decides to SHUT DOWN the operations. What are the firm's profits / losses? Was this a wise decision? Explain.
Consider a firm that uses capital and labor as inputs and sells 5,000 units of output per year at the going market price of $10. Also assume that total labor costs to the firm are $45,000 annually. Assume further that the total capital stock of the firm is currently worth $100,000, that the return available to investors with comparable risks is 10 percent annually, and that there is no depreciation. Calculate the economic profit and accounting profit of this firm? Explain your answer.?

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