D. The Airbus A350, first entered service in January 2015 with Qatar Airways, is one of the most techno- logically advanced passenger airplanes today. Made largely of carbon fibre reinforced polymer, its high fuel efficiency makes it a popular choice of long-range airliner for airlines. Suppose Airbus' production function for this plane is C = 20 +5Q², and the plane is sold at a price of P = $50. 1. Create a table detailing Airbus' total cost, average total cost, marginal cost, total revenue, marginal revenue, and profit for each quantity between 0 and 10 of the A350. 2. What is Airbus' profit-maximizing quantity for the A350? How much profit does Airbus make? 3. Plot Airbus' marginal cost, marginal revenue, and average total cost curves, lable the profit-maximizing quantity Q*, and the area of company's profit. 4. Plot Airbus' total cost and total revenue curves, lable the profit-maximizing quantity Q*. 1 5. Plot Airbus' profit curve, lable the profit-maximizing quantity Q* and profit ^*. 6. Facing increased demand as the pressure of the pandemic eases up, the market price of this plane has increased to $70. Create the same table for the same quantities. What is Airbus' profit-maximizing quantity now? 7. Using the two pairs of price and quantity you got from parts 2 and 6, graph the supply curve of the Airbus A350, and derive the supply function.
D. The Airbus A350, first entered service in January 2015 with Qatar Airways, is one of the most techno- logically advanced passenger airplanes today. Made largely of carbon fibre reinforced polymer, its high fuel efficiency makes it a popular choice of long-range airliner for airlines. Suppose Airbus' production function for this plane is C = 20 +5Q², and the plane is sold at a price of P = $50. 1. Create a table detailing Airbus' total cost, average total cost, marginal cost, total revenue, marginal revenue, and profit for each quantity between 0 and 10 of the A350. 2. What is Airbus' profit-maximizing quantity for the A350? How much profit does Airbus make? 3. Plot Airbus' marginal cost, marginal revenue, and average total cost curves, lable the profit-maximizing quantity Q*, and the area of company's profit. 4. Plot Airbus' total cost and total revenue curves, lable the profit-maximizing quantity Q*. 1 5. Plot Airbus' profit curve, lable the profit-maximizing quantity Q* and profit ^*. 6. Facing increased demand as the pressure of the pandemic eases up, the market price of this plane has increased to $70. Create the same table for the same quantities. What is Airbus' profit-maximizing quantity now? 7. Using the two pairs of price and quantity you got from parts 2 and 6, graph the supply curve of the Airbus A350, and derive the supply function.
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.6IP
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