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At 9:46pm on June 15, 2011, Nadia said…

This is what i found online.


Question no.1:

Suppose you are working in a mobile making firm operating in a perfectly

Competitive market. Your cost of production is given by:

TC = 5000 + Q2

Where Q is the level of output and TC is total cost. The fixed cost of production is


a. If the price of a mobile is Rs.7200, how many mobiles should you produce to

Maximize profit?




Take derivative of  to find the value of marginal cost where Q is the level of output

Tc is the total cost.



Now we find the marginal cost which is 2Q and the fixed price is 5000.

 Where MC=MR………..(1)

MR= price

And price is7200


MC= 2Q put the value of MC an MR in equation one






b) What will your profit level be?


(Marks = 6 + 6)

Question no.02:

If a sales tax of Rs.50 per unit of output is placed on one firm whose product sells for

Rs.500 in a competitive industry.

What will happen to price, output and profit?

(Marks = 03)


The level of profit will be lower because the level of price at very high point.


It is just idea solution plz don’t copy as it is.



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