april091010
New member
- Joined
- Dec 5, 2016
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We are learning profit functions in my managerial economics class, and I'm taking it online. I don't understand it at all. The book doesn't do a very good job going through the steps, so now I'm looking at the homework going, huh? I have to do 5 problems like this by Friday, can someone please complete this problem and show me step by step how this works? Once I see it step by step I should be able to figure out the other 4. Please help, I'm so lost.
1. Suppose a producer operates in a perfectly competitive market – that is, the firm is able to sell as much output as it can produce without lowering selling price. The firm’s cost accountants have developed the following revenue and cost functions:
Total revenue (TR) = 60Q
Total cost (TC) = 12,200 + 10.5Q + 0.05Q2
(a) Is the TR function a straight line or a curve?
(b) Is the TC function a straight line or a curve?
(c) What does the TC curve say about the shape of the marginal cost (MC) curve? That is, are marginal costs increasing or constant?
(d) Write the profit (π) function.
(e) Write the first derivative of the π function.
dπ/dQ =
(f) Calculate profit-maximizing Q* by setting the first derivative of the profit function = 0 and solving for Q.
(g) Calculate dollar profit at Q*.
(h) Calculate total revenue at Q*.
1. Suppose a producer operates in a perfectly competitive market – that is, the firm is able to sell as much output as it can produce without lowering selling price. The firm’s cost accountants have developed the following revenue and cost functions:
Total revenue (TR) = 60Q
Total cost (TC) = 12,200 + 10.5Q + 0.05Q2
(a) Is the TR function a straight line or a curve?
(b) Is the TC function a straight line or a curve?
(c) What does the TC curve say about the shape of the marginal cost (MC) curve? That is, are marginal costs increasing or constant?
(d) Write the profit (π) function.
(e) Write the first derivative of the π function.
dπ/dQ =
(f) Calculate profit-maximizing Q* by setting the first derivative of the profit function = 0 and solving for Q.
(g) Calculate dollar profit at Q*.
(h) Calculate total revenue at Q*.