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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.

 

 

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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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