Scribd
Upload
29 views1 page

Analysis in Economics Test 1

This document contains 4 economics problems analyzing costs, revenues, profits, and demand. Problem 1 involves calculating marginal cost, output that minimizes average variable cost, solving for marginal cost equals price, and profit maximizing output. Problem 2 involves calculating price elasticity, unit elasticity point, expressing total revenue as a function of output, and output maximizing total revenue. Problem 3 involves calculating price elasticity of demand and describing the price-demand relationship. Problem 4 involves determining profit-maximizing output, output minimizing average cost, marginal costs at that quantity, and minimum average costs.

Uploaded by

Mutahir Hussain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
29 views1 page

Analysis in Economics Test 1

This document contains 4 economics problems analyzing costs, revenues, profits, and demand. Problem 1 involves calculating marginal cost, output that minimizes average variable cost, solving for marginal cost equals price, and profit maximizing output. Problem 2 involves calculating price elasticity, unit elasticity point, expressing total revenue as a function of output, and output maximizing total revenue. Problem 3 involves calculating price elasticity of demand and describing the price-demand relationship. Problem 4 involves determining profit-maximizing output, output minimizing average cost, marginal costs at that quantity, and minimum average costs.

Uploaded by

Mutahir Hussain
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 1

Analysis in Economics Test 1 Problem 1

A producer that is operating in a perfectly competitive market has the following short-run total cost function: C(x) x3 6x2 140x 750 ( x : output; C(x) : cost of producing the output x ). 1. Calculate the marginal cost function and interpret it for x 15. 2. At what level of output are average variable costs minimised? What is the minimum average variable cost? 3. Solve the equation C ' x c v x and comment. 4. What quantity maximises profits when the producer has a unit price of 155 . How much is the maximum profit?

Problem 2
Consider the demand function x( p) 27 p2 , 0 p 3 3. 1. Calculate the elasticity function depending on price. 2. For which price do we have unit elasticity? Interpret your result. 3. Express total revenue as a function of output. 4. At which quantity is total revenue maximised? (You do not have to test the sufficiency condition.)

Problem 3
The following function represents the demand of a certain good depending on its price x( p) = 50 -10 p +1 . 1. Calculate and interpret the elasticity of demand with regards to price at p = 5. 2. Describe the dependency of price on demand as a function.

Problem 4
A manufacturer has the following total cost function:

C(x) 128 60x 8x2

and the demand function p(x) 180 2x . 1. Determine the level of production that results in the maximum profit. 2. At what level is the average minimised? What are the marginal costs at this quantity? What are the minimal average costs?

You might also like