Macroeconomics
Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 12, Problem 8SPA
To determine

What is the market price, market output, and the economic loss or profit of the firm.

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Question 1a A firm faces the following average revenue (demand) curve: P(Q) = 240 - 0.04 Q where Q is the weekly production and P(Q) is the price, measured in cents per unit. The firm's cost function is given by TC(Q)=120Q+50000. Assume that the firm maximises profit. i) What is the profit maximization quantity and price. ii) What is the total profit per week?
A local microbrewery has total costs of production given by the equation TC=500+10q+5q2. This implies that the firm's marginal cost is given by the equation MC=10+10q (you do not need to be able to show this). The market demand for beer is given by the equation QD=105 – (1/2)*P. a) Write the equations showing the brewery's average fixed costs .
A local microbrewery has total costs of production given by the equation TC=500+10q+5q^2. This implies that the firm's marginal cost is given by the equation MC=10+10q (you do not need to be able to show this). The market demand for beer is given by the equation QD=105 – (1/2)*P. a) What is the break even quantity in short run.
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