1-Which price leads to the maximum profits? A) $40,000 B) $26,000 C) $30,000 D) $39,000 2- What are profits at a quantity of 4,300? a) $39,775,000 b) $30,000,000 c) $34,375,000 d) $36,975,000 3- At what quantity does approximate marginal revenue equal marginal cost? a) 5,000 b) 5,900 c) 6,400 d) 4.000
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A:
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- A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat from Farm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel. The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) = 500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demand for flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys from one of the suppliers) and that the mill can by 1/2 of a bushel. Then the maximum profit is attained when x = y = bushels bushels The amount of the flour mill's maximum profit is $According to Professor Kosmos, the demand for hot chocolate from the university café has the schedule QD = 2500 – 135p, where p is the price. The owner of the café says that their supply schedule is QS = 1600 + 315p. i) Identify the café’s daily profit maximising price and quantity. ii) When a new hot chocolate machine is installed, the Professor finds that the supply schedule has changed to QS = 1625 + 365p. What are the café’s new daily profit maximising price and quantity? iii) Find the price elasticity of demand for the café’s hot chocolate and comment on the result.Omari's HookNLadder is the only company selling fire engines in the fictional country of Alexandrina. Omari initially produced four trucks, but then decided to increase production to five trucks. The following graph gives the demand curve faced by Omari's HookNLadder. As the graph shows, in order to sell the additional fire truck, Omari must lower the price from $105,000 to $90,000 per truck. Notice that Omari gains revenue from the sale of the additional engine, but at the same time, he loses revenue from the initial four engines because they are all sold at the lower price. Use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial four engines by selling at $90,000 rather than $105,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $90,000. PRICE (Thousands of dollars per fire engine) 165 150 135 120 105 Omari 90 75 60 45 30 15 Revenue Lost Demand…
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- Your marketing department project that the supply function for bottles of wine is given by; Qxs=1800 +3Px −5Pr− 1Pw Question: How many bottles need to produce? Given: Px= 290 Pr= 210 Pw= 1,600 Required: a. Compute the linear supply function b. Compute the inverse supply functionConsider a price-searching firm, Sam’s Fire Engines, which sells fire engines in the fictional country of Pyrotania. Initially, Sam’s produced seven fire engines but then decided to increase production to eight fire engines. The following graph shows the demand curve the firm faces. To sell the additional engine, Sam’s must lower its price from $100,000 to $50,000 per engine. (Hint: Sam’s Fire Engines gains revenue from the additional engine it sells, but it also loses revenue from the initial seven engines because it sells them all at the lower price.) On the following graph, use the purple rectangle (diamond symbols) to shade the area representing the revenue lost from the initial seven engines by selling at $50,000 rather than $100,000. Then use the green rectangle (triangle symbols) to shade the area representing the revenue gained from selling an additional engine at $50,000.The marginal price for a weekly demand of x bottles of shampoo in a drugstore is given by the function shown below. Find the price-demand equation if the weekly demand is 150 when the price of a bottle of shampoo is $2. What is the weekly demand when the price is $4.50? - 9,000 p'(x) = (3x + 50)? 2 Find the price-demand equation. (Type an equation.)