problem2keyS06

problem2keyS06 - 1 5 3 4 1.5 2.5 4 2 2 5 2.5-2.5 6-2 3-5...

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E303. Fall 2005 Problem Set #2 (Note: On this problem, you may use EXCEL to generate numbers, but please fill in your answers 1. Consider the total profit function π = TR - TC = (10 –Q)Q –.25Q 2 a. Create a table that shows Total Revenue, Total Cost and Total Profit, (in your table, let quantity run from 0 to 8 in increments of 1.) Indicate in your table where total profits are maximized Q TR TC T Profit 0 0 0 0 1 9 0.25 8.75 2 16 1 15 3 21 2.25 18.75 4 24 4 20 5 25 6.25 18.75 6 24 9 15 7 21 12.25 8.75 8 16 16 0 b. Next illustrate the relationship between TR, TC and total profit in the coordinate axes below 0 5 10 15 20 25 30 0 5 10 TR TC Profit Max MR MC
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On your graph, -highlight the point where total revenues are maximized. -show how profits may be seen. -highlight the point where total profits are maximized c. Next, create a table showing marginal revenues, marginal costs and marginal profits. Indicate in this table where TOTAL profits are maximized Q MR MC M PRO 0 10 0 10 1 8 0.5 7.5 2 6
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Unformatted text preview: 1 5 3 4 1.5 2.5 4 2 2 5 2.5-2.5 6-2 3-5 7-4 3.5-7.5 8-6 4-10 d. Finally, in the coordinate axes below create a graph that illustrates the relationships between marginal revenue and marginal cost. - show the point where TOTAL profits are maximized- show the point where marginal profits are zero. .-8-6-4-2 2 4 6 8 10 12 5 10 MR MR MR MC M PR0 = 0 2.Take the derivatives of the following functions. Do not simplify. a. f(x) = 10 f’(x) = ___0 ___________________________ b. f(x) = 20x 2 f’(x) = ___40x _________________________ c. f(x) = 30x f’(x) = ____30 _________________________ d. f(x) = 20x + 30x 3 f’(x) =___20+90x 2 _____________________ e. f(x) = (10 + 15x 2 )(3x – 4x 3 ) f’(x) =_30x(3x – 4x 3 )+ (3-12x 2 )(10 + 15x 2 )_____________________________ f. f(x) = 10/x 2 f’(x) =___-20/x 3 ________________...
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This note was uploaded on 04/12/2010 for the course ECON 303 taught by Professor Shrestha during the Fall '08 term at VCU.

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problem2keyS06 - 1 5 3 4 1.5 2.5 4 2 2 5 2.5-2.5 6-2 3-5...

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