Posted by **Anonymous** on Sunday, August 8, 2010 at 12:15pm.

Ever Kleen Pool Services provides weekly swimming pool maintenance in Atlanta. Dozens of firms provide this service. The service is standardized;each company cleans the pool and maintains the proper levels of chemicals in the water. The service is typically sold as a four month summer contract. The market price for the four month service contract is $115.

Ever Kleen Pool Services has fixed costs of $3500. The manager if Ever Kleen has estimated the following marginal cost function for Ever Kleen, using data for the last two years:

SMC=125 - 0.42Q +0.0021Q^2 (suppose to be exponent 2)

Where SMC is measured in dollars and Q is the number of pools serviced each summer. Each of estimated coefficients is statistically significant at the 5 percent level.

a.Given the estimated marginal cost function, what is the average variable cost function for EverKleen?

b.At what output level does AVC reach its minimum value? What is the value of AVC at its minimum point?

c.Should the manager of EverKleen continue to operate, or should the firm shut down? Explain.

d.The manager of EverKleen finds two output levels that appear to be optimal. What are these levels of output and which one is actually optimal?

e.How much profit (or loss) can the manager of EverKleen Pool Services expect to earn?

f.Suppose EverKleen's fixed costs rise to $4000. How does this affect the optimal level of output ? Explain

- economics -
**Anonymous**, Friday, February 27, 2015 at 1:47am
post the answer

## Answer This Question

## Related Questions

- Managerial Economics - Everkleen Pool Services (EPS) provides weekly swimming ...
- Managerial Economics - Everkleen Pool Services (EPS) provides weekly swimming ...
- Accounting - Patty Piper recently began a swimming pool chlorination service. ...
- spanish - how do you say pool in spanish? piscina = pool charca is pool If you ...
- maths - A swimming pool has two identical sides in the shape of a trapezium. All...
- chemistry - The average swimming pool has a volume of about 28,000 gallons. ...
- Physics - A light source, S, is located 2.9 m below the surface of a swimming ...
- Math - A swimming pool is 0.6m deep, 1.8m, 2m long. A. What is the volume of the...
- Math - A swimming pool is in the shape of a cuboid with dimensions 50 metres ...
- Math - A swimming pool size is 42 m long and 55 m wide with an average depth of ...

More Related Questions