Question

Given the functions: ATC= x-6+(30/x) and AR =10+(15/x), where x represents output, find TC, TR, and the output level when net revenue is zero.

Answer 1

$AR =10+(15/x)$

$ATC= x-6+(30/x)$

$ATC=TC/X$

$TC=ATC.X$

$TC=(X-6+30/X)X$

$TC=X.X-6X+30$

$AV=TR/X$

$TR=AV.X$

$TR=(10+15/X)X$

$TR=10X+15$

$Net revenue=TR-TC$

$10X+15-(X.X-6X+30)$

$X.X-16X+15=0$

$X(X-15)-1(X-15)=0$

$X-1=0 X=1$

$X-15=0 X=15$

The output level when net output is zero is 15 or 1