Microeconomic Theory
12th Edition
ISBN: 9781337517942
Author: NICHOLSON
Publisher: Cengage
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Question
Chapter 2, Problem 2.2P
(a)
To determine
To compute: The level of output to maximize profit and calculating profit, thereof.
(b)
To determine
To show: The second-order condition is satisfied in (a).
(c)
To determine
To discuss: If ‘marginal revenue is equal to marginal cost’ rule is followed in the calculation.
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The table shows the marginal cost C'), the marginal revenue R'(x) for producing x items. The third column, P'(x). is partially completed. All values are in dollars per item.
(a) Complete the remaining entries in the third column.
(b) What does the table tell you about the revenue function?
(c) Find the production level that maximizes profit.
(a) Complete the remaining entries in the third column of the table on the right.
c'(x)
R'(x)
P'(x)
-21
62
41
(b) What does the table tell you about the revenue function? Select one and complete the
box, if necessary.
10
41
41
40
14
41
O A. Items sell for $
each.
70
41
41
O B. There is not enough information to determine anything about the revenue function.
90
206
41
- 165
(c) Find the production level that maximizes profit.
Profit P(x) is a maximum when x=
items are produced.
Let x denote the level of output of a firm’s production process. The cost function is given by C (x) = x(x +1)+120 and the demand function of the product by x =1000 - 2p.
(a) Compute profit E(x).
(b) Find the output x at which profit is maximized.
Please answer both subparts.
I will really upvote. Thanks
Find the marginal profit.
C(x)=4x^2; R(x)=x^3+5x+15
Chapter 2 Solutions
Microeconomic Theory
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