Escolar Documentos
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Cultura Documentos
P2.7
A.
Price = -0.0025Quantity + 20
Quantity = (20 - Price)/(0.0025) = 8000 - 400P
B.
Quantity
Price,$
sold TR
5 6000 30000
6 5600 33600
7 5200 36400
8 4800 38400
9 4400 39600
10 4000 40000
11 3600 39600
12 3200 38400
13 2800 36400
14 2400 33600
15 2000 30000
max 40000
The revenue maximising price is $10. This is not the profit maximising ticket price as the
cost (FV and VC) have not been deducted.
P2.10
We could use Min AC = TC/Q
Q = 55,000
MC = 800 + 0.008(55,000) = $1240
AC = $1240
Profit = TR – TC = 1800(55,000) - 0.006(55,000*55,000) - 12,100,000 - 800(55,000) -
0.004(55,000*55,000) = $12,650,000
B.
WE could use Max Profit = TR-TC
Profit maximising output is MR = MC
1,800 - 0.012Q=800 + 0.008Q
Q=50,000
C.
Cost is minimized at AC = MC = $1240. The output at that point is 55,000 and profit is
$12.65m. The profit per unit is $230.
Profit maximising output is at the point where MR = MC = $1240. The output at that point is
50,000 and profit is $12.9m. The profit per unit is $258.
Although cost is minimized at 55,000, the profit is less than producing at 50,000 units. This is
because the cost of producing after 50,000 units is higher than the increase in revenue.
P3.4
A. Determine the demand faced by CPC in a typical market in which P = $10, Pop =
1,000,000 persons, I = $60,000, and A = $10,000.
B. Calculate the level of demand if CPC increases annual advertising expenditures from
$10,000 to $15,000.
Q = - 4,000P + 55,000
P = 13.75 – 0.00025Q
When advertising is $15,000,
Q = 62,000 – 4000P
P = 15.625 – 0.00025Q
P3.10