Three firms have identical revenue and profit functions. Firm 1 is a private sector firm operated...
Three firms have identical revenue and profit functions. Firm 1 is a private sector firm operated by an owner-manager who wishes to maximize profit. Firm 2 is managed by an revenue-maximizing manager whose pay is proportional to the firm's revenue. Firm 3 is a government-owned firm that has been instructed to maximize the amount of employment, L, subject to the constraint that revenue must not be negative.
Each of the three firms has a revenue function R(q)=140−2q^2 and a cost function of C(q)=80+40q.
Determine how much output each firm chooses.Firm 1 will produce such that q= _____ units.
Homework Answers
ANSWER:
given that:
Three firms have identical revenue and profit functions. Firm 1 is a private sector firm operated by an owner-manager who wishes to maximize profit. Firm 2 is managed by an revenue-maximizing manager whose pay is proportional to the firm's revenue.
Firm 1:
MR(Marginal revenve) = MC(Marginal cost)
TR = 140q - 2q2
MR = 140 - 4q
TC = 80 + 40q
MC = 40
The profit maximizing condition is
MR = MC
140 - 4q = 40
4q = 100
q = 100 / 4 = 25 units
FIrm 1 will produce such that q = 25 units
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Three firms have identical revenue and profit functions. Firm 1
is a private sector firm operated...
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Subject: HRM
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you to prepare a report for their review focusing specifically on
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You have recently been hired as the Director of Human Resources
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you to prepare a report for their review focusing specifically on
organizational behavior within the company. Review the Wilson
Brothers Case Scenario in depth and address the required topic
listed below in your analysis report. Marks are allocated for
thoroughness of coverage of...
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