Question

1. Consider that the C & A Lawnmower Firm operates in a highly competitive industry. The MB(Q)-200, which means that the price of each service is $200. The estimate for the total cost is given by CQ-80,000+100+0.1Q2. Use this information to answer the following questions. a. What is net benefit maximizing level of output? b. What is the total benefit function? c. What is the maximum net benefit? Please include the letter with each part of your answer (a, b, с). 2. Suppose you are an economist of Petram company and you estimated the demand for the company's product as 150,000 1.5P, what price should you charge in order to maximize revenues from sales? 3. The production function for a competitive firm is Q-K.5L.5. The firm sells its output at a price of S10 and can hire labor at a wage of $5. Capital is fixed at one unit and costs $2. The maximum profits are 4. Ajax copy company wants to expand production. It currently has 20 workers who share eight copiers. Two months ago, the fim added two copiers, and output increased by 100,000 pages per day. One month ago, they added five workers, and productivity also increased by 50,000 pages per day. Copiers cost about twice as much as workers. Would you recommend they hire another employce or buy another copier? Show your work 5. Consider a market supply and demand represented by the following: and Use this information to answer the following questions a. Calculate equilibrium price and quantity. b. What is the consumer surplus? c. If the government imposes an excise tax of $3, what would be the new equilibrium price, quantity? d. What would happen to the consumer surplus? Please include the letter with each part of yur answer (a, b, c, d).

Answer 1

It's mandatory to answer only first question

MB - 200 CCO) = 80,000 + 100 +0102 Net Benefit Max at, → MB = MC 200 - 10.20 20 = 190, Q* - 190 X10 - 950 units b) Total Benefit funch TB = 2000 Ang co Max Net Benefit = 200 Q* - 80,000-10Q* - LQ * 2 = 200X950 - 80,000 - 10x950 – 01 (950)2 = 190,000 -80,000 - 9500 - 90,950 = $ 10,250 Ane Qa) Q = 150,000 - 1.5P, TR= P Q = 150,000 P-10582 OTR – 150,000 - 3 P = 0 al PX= 50,000. $ Aon Q = Sko SL, then Q=JL at eam - P=10 W=5: R=1, 8=2. MPL = aQlal = 16 UMPL= w e Px M P L = 5T 10 x1 =5 LN zl 5 then T = P.O - WL- ok. = 10 x 1 – 5-2. = $3 And it