Posted: September 13th, 2017
review the equations and interpret your explanations according to the results, and make your answers more specified toward the company not in general.
I have written you the right equations and the correct answers just plot it in the paper and interpret your explanations according to the following results:
Data from the previous assignment.1:
Demand curve QD = 38650 – 42P
Inverse of Demand Curve P = 38650-Q/42 = 38650/42 – Q/42
Since:
TC = 160,000,000 + 100Q + 0.0063212Q2
FC = 160,000,000
VC = 100Q + 0.0063212Q2
AVC = VC/Q = 100Q + 0.0063212Q2 / Q = 100Q + 0.0063212Q
TR = P*Q = (38650/42) Q – Q2/42 = 92023Q – 0.00238Q2
MC = ?TC/?Q = 100+2(0.063212) Q
MR = ?TR/?Q = 92023-2(-0.0238) Q
Maximize profit = MC = MR
100+0.0126424Q = 92023 – 0.0476Q
Therefore:
Q = 13612 units
P = 38650/42 – 13612/42 = 272 cents
TR = P*Q = 272*13612 = 3702464 cents
AVC = 100+ (0.0063212*13612) = 186
Therefore:
P>AVC
272 > 186
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