Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN: 9781305506381
Author: James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher: Cengage Learning
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Question
Chapter 11, Problem 3E
a)
To determine
To write: An equation for the total revenue (TR) function in terms of Q
b)
To determine
To specify: The marginal revenue function
c)
To determine
To write: An equation for the total cost (TC) function in terms of Q
d)
To determine
To Specify: The marginal cost function
e)
To determine
To Describe: The following:
- Equation for total profits
- level of output(Q) are total profits maximized
- Price to be charged
- Total profits at the output level
f)
To determine
To describe: The answers in Part (e) by equating the marginal revenue and marginal cost functions, evaluate in Parts (b) and (d) and solving for Q.
g)
To determine
To describe: The model of market pricing behavior has been assumed in the given problem.
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(a) Teddy Jis a manufacturer of dish washing liquid. If his monthly demand function for 750ml
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The Poster Bed Company believes that its industry can best be classified as monopolistically competitive. An analysis of the demand for its canopy bed has resulted in the following estimated demand function for the bed:P = 1760 - 12QThe cost analysis department has estimated the total cost function for the poster bed asTC = (1/3)Q3 - 15Q2 + 5Q + 24,000a. Calculate the level of output that should be produced to maximize short-run profits. b. What price should be charged? c. Compute total profits at this price-output level. d. Compute the point price elasticity of demand at the profit-maximizing level of output. e. What level of fixed costs is the firm experiencing on its bed production? f. What is the impact of a $5,000 increase in the level of fixed costs on the price charged, output produced, and profit generated?
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Chapter 11 Solutions
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
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