Answer to Question #131783 in Economics of Enterprise for Addisu

Question

Suppose that the demand for as popular brand of coffee drink is given by the equation
Qx=15-2PX+0.0011+5Py
Where :Qx= monthly consumption of the coffee per family in cup.
Px=price per cup often the coffee drink =3birr.
I=median annual family income =10000birr.
Py=price per cup of as competing brand often coffee drink =3birr.
Required :
1. Interpret the parameter estimates
2. Calculate the monthly consumption if the coffee given the parameters
3. Rewrite the demand function
4. Suppose that as median annual family income increased to 10000. How does this change the answer to part b.

Suppose that the total cost function of am firm is given as TC=2000+20Q(square )
Determine the out put level that minimizes average total cost (ATC).at this out put level, what is TC? ATC? MC? verify that at this out put level MC=ATC,and that ATC intersects MC from below.
Determine the out put level that minimizes average variable cost (AVC).

Answer 1

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