A. The average hauling (freight) cost is $8Q; AFC = 8Q. Write the firm's average aggregated cost equation.
B. Now suppose the firm is facing the following market demand:
Q = 7,600,000 - 100 P
Determine the optimal number of plants that the firm should have to take full advantage of the market demand.
C. Calculate the firm's profit.
D. Compare the firm's profit with multiple plants with its profit with a single plant.
Hint: The firm's MC equation based on its aggregated total cost (including the freight cost) is: MC = 10,000 - 8 Q + .012 Q2
Recently Asked Questions
- What pros and cons of do documenting network changes for organizations?
- I am needing help with this problem I am really confused on how to even get started. If you can help it will be greatly appreciated. Problem 14-A. In the RLC
- What is the cult of the offensive and how do scholars view it? What are the two system level factors for WWI? Do you think tweaking either of these factors