QuestionQuestion

Question 1

The estimated demand cure for a firm’s product Is represented by the equation:
Q = 66000 – 10 P
Where Q is the quantity sold per year and P is the price per unit
a) Based on the estimated demand curve, write the equations for Solis
i) Total Revenue
ii) Average Revenue
iii) Marginal Revenue
b) What is the maximum total revenue per year that the firm can obtain from sales of its product? Give the exact dollar amount and show how you determined it.
c) Calculate the point price elasticity of demand for the firms product when Q = 50000. Is the demand elastic or inelastic at the quantity? How do you know?

Question 4

The following table represents the short-run production function for your firm. The price of product is $10 per unit, labor costs $40 per unit, and price of capital is $10 per unit. Complete the following table, and then answer the accompanying questions.
a) Which inputs are fixed inputs? Which are the variable inputs?
b) How much are your fixed costs?
c) What is the variable cost of producing 40 units of output? Assume that L is indivisible, (that is, it must be hired in an integer number of units)
d) How many units of the variable input should be used to maximize profits
e) What are you maximum profits
f) Over what ranged of variable input usage do increasing marginal returns exist?
g) Over what range of variable input usage do decreasing marginal returns exists
h) Over what range of variable input usage do negative marginal returns exist?

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Question 1

The estimated demand cure for a firm’s product Is represented by the equation:
Q = 66000 – 10 P
(Q-66000)/10 = P
Where Q is the quantity sold per year and P is the price per unit
a) Based on the estimated demand curve, write the equations for Solis
i) Total Revenue
ii) average Revenue
iii) Marginal Revenue

b) What is the maximum total revenue per year that the firm can obtain from sales of its product? Give the exact dollar amount and show how you determined it.
c) Calculate the point price elasticity of demand for the firms product when Q = 50000. Is the demand elastic or inelastic at the quantity? How do you know

(a) Based on the estimated demand curve,write...

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