Saturday
April 18, 2015

Homework Help: Math

Posted by 413 on Monday, January 15, 2007 at 4:03pm.

The demand for item A is
P=40 -3.5Q
The production of A entails the following average variable costs:
AVC=1.5Q - 35
Fixed Costs are 24.

a) Calculate the revenue maximizing price of A
Revenue= PQ
Revenue= 40Q-3.5Q^2
Revenue' = 40-7Q
Q=40/7
P=40-3.5(40/7)
P=20
seems right?

b) Calculate the output level that minimizes the Average total cost.
-What is the average total cost equation?
do you just add the fixed cost to the AVC
ATC=1.5Q-35+24
ATC=1.5Q-11

or

is it finding variable cost first by dividing AVC by Q, then adding the fixed cost, then divide by Q
VC=1.5Q^2-3.5Q
TC=1.5Q^2-3.5Q+24
ATC=1.5Q-3.5+24/Q

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

economics - HELP!!!!! One and only Inc is a monopolist. The demand function for ...
Economics - Willy's widgets, a monopoly, faces the following demand schedule (...
ECONOMICS - Q = 39,000 500P AVC = 30 + 0.005Q Q is quantity demanded and ...
Economics - Q = 39,000 500P AVC = 30 + 0.005Q Q is quantity demanded and ...
econ - You want to determine the profit-maximizing production quantity for a ...
Macroeconomics - You want to determine the profit-maximizing production quantity...
Macroeconomics - I need help to answer this question? You want to determine the ...
Economics - 10. An industry currently has 100 firms, all of which have fixed ...
Microeconomy - uppose the demand for these jets is given by the equation: P = ...
marketing - 1.A store has fixed costs of 80,000 and an avarage gross margin of ...

Members