Answer to Question #288588 in Microeconomics for Maya

Question

Q:A firm has the following information on production and costs from past data:

Output (Y) 0 6 12 18

Total Cost (TC) 9 2775 5361 8199

If the total cost function is known to be

TC =aY3 +bY2 +kY + f , and the demand for the product of the firm is Y = 320 − (1 2)⋅ P answer the following: 1.calculate the break even and profit maximizing levels of output and price.

2.What is the relationship between price, marginal revenue and own price elasticity of demand at the profit maximization point.

Answer 1

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