Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
9th Edition
ISBN: 9780134643175
Author: Robert Pindyck, Daniel Rubinfeld
Publisher: PEARSON
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Textbook Question
Chapter 8, Problem 4E
Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by C = 200 + 2q2, where q is the level of output and C is total cost. (The marginal cost of production is 4q; the fixed cost is $200.)
- a. If the
price of watches is $100, how many watches should you produce to maximize profit? - b. What will the profit level be? c. At what minimum price will the firm produce a positive output?
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A company in the software development sector has a market demand and production costs given
by:
q = 20 - P
CT (q) = q² - 4q
(Quantities are expressed in thousands of units).
a) Find the optimal price and production.
b) Calculate the level of benefits obtained.
c) What would be the quantity produced and the price in the long run? Comment on the long-
term benefit.
d) Graph both situations (a graph for the short run and a graph for the long run).
Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by:
C= 200 + 2Q2, where Q is the level of output and C is the total cost. a) If the price of watches is $100, how many watches should you produce to maximize profits?b) What will be your profit level?c) At what minimum price will the firm produce a positive output?
How can I answer these questions by using the graph?
Chapter 8 Solutions
Microeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (9th Edition) (Pearson Series in Economics)
Ch. 8 - Prob. 1RQCh. 8 - Prob. 2RQCh. 8 - Prob. 3RQCh. 8 - Prob. 4RQCh. 8 - Prob. 5RQCh. 8 - Prob. 6RQCh. 8 - Prob. 7RQCh. 8 - Prob. 8RQCh. 8 - Prob. 9RQCh. 8 - Prob. 10RQ
Ch. 8 - Prob. 11RQCh. 8 - Prob. 12RQCh. 8 - Prob. 13RQCh. 8 - Prob. 14RQCh. 8 - Prob. 1ECh. 8 - Prob. 2ECh. 8 - Prob. 3ECh. 8 - Suppose you are the manager of a watchmaking firm...Ch. 8 - Prob. 5ECh. 8 - Prob. 6ECh. 8 - Prob. 7ECh. 8 - Prob. 8ECh. 8 - Prob. 9ECh. 8 - Prob. 10ECh. 8 - Prob. 11ECh. 8 - Prob. 12ECh. 8 - Prob. 13ECh. 8 - A sales tax of 1 per unit of output is placed on a...Ch. 8 - Prob. 15E
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