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 Introduction and Instructions You have recently been hired as the Director of Human Resources...
Subject: HRM
Introduction and Instructions
You have recently been hired as the Director of Human Resources
for Wilson Brothers Canada and have HR responsibility for all of
the company’s Canadian operations. Bob and John Wilson have asked
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...
PROBLEM #1 Consider a market with two firms that sell products that are identical. Su market demand is as follows: P-56-Q , where Q measures the total output produced by both firms (that is, Q=q +q.) and qi and q, are the quantities produced by firm 1 and firm 2, respectively. The per-unit cost of production is $6 for each firm, and so the firm's cost functions are 6q, and 6q, respectively. Each firm seeks to maximize profits. The firms...
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Question #5: (10 points) Suppose that a monopolist produces an identical product in three plants and face an inverse demand function P = 40 - QF = Q, + Q, +Q,. The output from the three plants is where total quantity in all three plants is Q produced at the costs c = Q + Q C₂ = 30, z = 2Q - Qz where C refers to the total cost required to produce Q, units from each facility, i...
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Subject: HRM
Introduction and Instructions
You have recently been hired as the Director of Human Resources
for Wilson Brothers Canada and have HR responsibility for all of
the company’s Canadian operations. Bob and John Wilson have asked
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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