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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

Rs.5000.

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

Maximize profit?

Solution:

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

MC=MR

2Q=7200

Q=3600

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.

Remember in prayers

Sidra Ayoub…

At 10:22am on July 09, 2010, ♥ Prince Adeez ♥ gave usman ahmed zia a gift
At 8:35am on July 8, 2010, Amna kiran said…
Sorry i m not accept in frnd list
At 8:24am on July 8, 2010, Amna kiran said…
Wt's the meaning of ur msg??

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