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Chapter 10

# Chapter 10 - 2 = 70000 – 28125-4500-7500 – 3125 Π =...

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Meghraj Patil Chapter 10 Home work 10.3 A. MC = AVC AVC = TVC / Q 0.02 + 0.00000036Q = 15000 + 0.02Q + 0.00000018Q*Q / Q 20 = 0.02 + 0.00000036Q Q = 500000 B. AVC = TVC / Q AVC = 15000 + 0.02Q + 0.00000018Q*Q / Q = 15000 + 0.02 * 500000 + 0.00000018*500000*500000 / 500000 AVC = 0.14 10.7 A. MC = AVC AVC = TVC/ Q 25 + 0.02Q = 5625 + 25Q + 0.01Q*Q / Q 25Q + 0.02Q*Q = 5625 + 25Q + 0.01Q*Q 0.01Q*Q = 5625 Q 2 = 562500 Q = 750 B. Economic Profit = π = TR – TC Π = P *Q – TC = 40Q – 5625 -25Q – 0.01Q*Q

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Meghraj Patil = - 5625 +15 Q – 0.01Q*Q But Q = 750 = 15 * 750 -0.01 * 750* 750 -5625 Π = 0 10.9 A. for profit maximization MR =MC 28 – 0.009Q = 3+ 0.001Q 25 = 0.001Q + 0.009Q 25 = 0.01Q Q = 2500 Now TR = P* Q 28Q – 0.0045Q 2 = PQ 28 – 0.0045Q = P P= 28 – 0.0045*2500 P= 28 – 11.25 P= 16.75 Now Π = TR- TC = 28* 2500 – 0.0045* 2500 2 - 4500- 3*2500- 0.0005* 2500
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Unformatted text preview: 2 = 70000 – 28125 -4500 -7500 – 3125 Π = 26750 B. Meghraj Patil Now P= 6 MC = TC/Q 3+ 0.001Q = 4500+ 3Q + 0.0005Q 2 / Q 3Q + 0.001Q 2 = 4500 + 3Q+ 0.0005Q 2 0.0005Q 2 = 4500 Q 2 = 9000000 Q = 3000 Now Π = TR-TC = P *Q –4500- 3Q – 0.0005Q 2 =6* 3000- 4500 – 3*3000- 0.0005(3000) 2 = 18000- 4500- 9000-4500 Π = 0 Case Study A. As per the given data most of the profit is based upon the size measure. We get the intercept maximized when the size measure is net worth at the same time we get the R 2 maximized. C. Other important factors are to be study in detailed are like advertising, research and development, study more detailed about the competitors, how they are increase their profit, like number of production, no of distributors, Economy of the production....
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