Question

3. Javier runs a shop in which he fixes flat tires; tire repair is a competitive industry Repairing tires is the only service that he sells, and he receives $12 for each flat tire he repairs. Javier has fixed costs of $150. His variable costs are 0.05Q2, where Q is the number of flat tires repaired-this means that his marginal costs are 0.1Q (a) Write down Javier's revenue function (b) What is Javier's profit function? (c) How many tires should Javier fix to maximize profit? (d) How large are Javier's profits when he chooses the output level you found in (c)?

Answer 1

Ans. 3.

Remmu function, R= P REBI20 cost Amatoe +00s TR-T CIsO+o.050 P12 - I50-0.0 sa We han 2 - ০19 for mavinize pui da 12-0.10 o -0.10- 2 flot tiu yaited whea a 120, pz 12G20) - 1So - 0.0S120) Mavimiu whn a12o