Homework Help Forum: To: Economyst

Posted by cb on Wednesday, November 4, 2009 at 8:13pm.

I did mean Q Suppose you are the manager of a small chemical company operating in a competitive market. Your cost of production can be expressed as C = 100 + Q2, where Q is the level of output and C is total cost. a. Is this a short-run cost function? b. What is the marginal cost function? c. What is the level of total fixed cost? d. If the price of chemicals is $60, what quantity of chemicals should be produced to maximize profit? e. What will be the level of profits? Economics/Math - economyst, Wednesday, November 4, 2009 at 9:15am Take a shot, what do you think? query. By Q2, do you really mean Q^2?

• To: Economyst - cb, Wednesday, November 4, 2009 at 8:15pm

  I did mean Q^2. Again, my issue is that I don't know how to calculate the output to maximize profits. I appreciate any help. Thank you.

  
  

• To: Economyst - economyst, Thursday, November 5, 2009 at 10:07am

  a) could be short run, could be long run. Not enough information to tell. b) MC is the first derivitive of the Total Cost. So, MC = 2*Q c) Fixed cost are cost that the firm incurs, regardless of the level of production. In your problem, FC=100. d) maximize where MC=MR. Here 2*Q=60. Solve for Q. (I get Q=30) e) profit is total revenue minus total costs. TR=30*60 = 1800. TC=100+(30)^2 = 1000. Ergo, total profit is $800.

  
  

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