Handout Ch 9 Solutions

# Handout Ch 9 Solutions - forQ 78 \$ 50 25 12 1 25 25 VC forQ...

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Solutions to Extra Problems for Chapter 9: Question 1 1a. 5 . 4 2 . 0 ) ( ' Q Q TR . This derivative represents the change in total revenue resulting from a change in output. In economics, this concept is called ‘Marginal revenue.’ 1b. 5 . 1 5 . 4 ) 15 ( 2 . 0 ) 15 ( ' TR . If the quantity demanded is 15 units, the change in total revenue from changing output by one unit is 1.5. Question 2 2a. Yes, this supply function makes sense in that it illustrates the ‘law of supply;’ the higher the price, the higher is the quantity supplied. 2b. 2 0003 . 0 ) ( ' Q Q p [since this derivative is positive, the ‘law of supply’ holds] 2c. 200 , 43 ) 000 , 12 ( 0003 . 0 ) 000 , 12 ( ' 2 p Question 3 3a. t t t TR 05 . 0 225 . 0 ) ( ' 2 3b. On-line sales would increase over time since the derivative of the TR function is positive. Question 4 4a. 50 12 . 1 ) ( ' Q Q VC 4b. 50 12 . 1 ) ( ' Q Q VC 4 . 72 \$ 50 ) 20 ( 12 . 1 ) 20 ( ' 20 VC
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Unformatted text preview: forQ 78 \$ 50 ) 25 ( 12 . 1 ) 25 ( 25 ' VC forQ 6 . 83 \$ 50 ) 30 ( 12 . 1 ) 30 ( ' 30 VC forQ Question 5 5a. 2 / 1 4 / 1 25 42 . ) ( ' Q Q Q . This derivative represents the change in profit resulting from a one unit change in the amount of orange juice processed. 5b. 8121 . 4 \$ ) 25 ( 25 ) 25 ( 42 . ) 25 ( ' 2 / 1 4 / 1 . If 25 gallons of orange juice are processed, the marginal profit (or additional profit) from processing one more gallon of orange juice is \$4.8121. Question 6 6a. 2 85 24 ) ( ' Q Q Q TC . This function represents the change in total cost resulting from a one unit change in the quantity produced. This represents ‘Marginal cost.’...
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