Microeconomics
13th Edition
ISBN: 9781337617406
Author: Roger A. Arnold
Publisher: Cengage Learning
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Chapter 8.5, Problem 3ST
To determine
Explain the same profit per unit in both cases.
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Students have asked these similar questions
Q.5 A firm is making two products A & B. Each unit of A incurs a cost of production to the tune
of $150 and that of B incurs a cost of $200. Product A earns a profit of $15/unit and B gets
$20/unit. The estimated monthly demand of both A & B is at maximum 500 units. Monthly
production budget is set at $50,000.How many units of A & B should the firm make in order to
maximize profit.
Conduct sensitivity analysis and answer the following questions:
1. State the optimal solution.
2. What is the objective function value?
3. Find out the range of profit for A in the objective function for which the above solution
remains optimal.
4. Which constraint/s is/are binding?
5. Interpret the shadow price for production budget.
The curves show the marginal cost (mc), average variable cost (avc), marginal revenue (mr), and average total cost (atc) curves for a firm that sells mid-range cars in a competitive market. Use the area tool to draw the area representing the firms profit or loss, if the firm produces 6000 cars. You're answer should be a rectangle drawn with four corners.
Part 2.
When the firm produces 6000 cars it will (either earn a profit or suffer a loss) of $________ million
Suppose that Tommy Hilfiger's marginal cost of a jacket is $200 and at one of the firm's shops, total fixed cost is $500 a day. The profit maximizing number of jackets sold in this
shop is 30 a day. Then the shops nearby from other retailers start advertising their jackets. The Tommy Hilfiger shop decides to spend $1,000 a day advertising its jackets, and its
profit maximizing number of jackets sold jumps to 60 a day.
Before advertising: Suppose that the price elasticity of demand is 2. Can you compute the price of a Tommy Hilfiger jacket? And the markup? Please, compute the amount of
maximal profits.
Chapter 8 Solutions
Microeconomics
Ch. 8.2 - Prob. 1STCh. 8.2 - Prob. 2STCh. 8.2 - Prob. 3STCh. 8.2 - Prob. 4STCh. 8.3 - Prob. 1STCh. 8.3 - Prob. 2STCh. 8.3 - Prob. 3STCh. 8.4 - Prob. 1STCh. 8.4 - Prob. 2STCh. 8.4 - Prob. 3ST
Ch. 8.4 - Prob. 4STCh. 8.5 - Prob. 1STCh. 8.5 - Prob. 2STCh. 8.5 - Prob. 3STCh. 8 - Prob. 1QPCh. 8 - Prob. 2QPCh. 8 - Prob. 3QPCh. 8 - Prob. 4QPCh. 8 - Prob. 5QPCh. 8 - Prob. 6QPCh. 8 - Prob. 7QPCh. 8 - Prob. 8QPCh. 8 - Prob. 9QPCh. 8 - Prob. 10QPCh. 8 - Prob. 11QPCh. 8 - Prob. 12QPCh. 8 - Prob. 13QPCh. 8 - Prob. 14QPCh. 8 - Prob. 15QPCh. 8 - Prob. 16QPCh. 8 - Prob. 17QPCh. 8 - Prob. 18QPCh. 8 - Prob. 19QPCh. 8 - Prob. 1WNGCh. 8 - Prob. 2WNGCh. 8 - Prob. 3WNGCh. 8 - Prob. 4WNGCh. 8 - Prob. 5WNGCh. 8 - Prob. 6WNGCh. 8 - Prob. 7WNGCh. 8 - Prob. 8WNGCh. 8 - Prob. 9WNG
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