Ec 115 Problem Set 6.
1. Consider the following total cost function
C
=
q
2
+ 6
q
+ 16
:
(a) Find the average cost (AC) and marginal cost (MC) functions.
(b) For what value of
q
is AC a minimum (check socs)?
(c) For what values of
q
is (i) MC below AC and (ii) MC is above AC?
(d) Sketch on the same graph the MC and AC functions.
q
is
given where
MC
=
p:
Find this supply function
q
=
q
(
p
)
=
1
4
[
p
6]
2
16
:
State a restriction on
p
p
is too low?
2. Suppose a monopolist faces demand function
q
= 36
2
p:
(a) Find the inverse demand function and derive the revenue function
(b) Find the average revenue and marginal revenue functions.
C
=
q
2
+ 6
q
+ 16
:
What level of
q
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This note was uploaded on 12/31/2011 for the course ECON MR 102 taught by Professor Huyduong during the Winter '11 term at RMIT Vietnam.
 Winter '11
 HuyDuong

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