you are given the following data for your firm, which sells high-capacity video

Question

you are given the following data for your firm, which sells high-capacity video MP3 players.

1a)Which of the following represents the correct formulas for PP and MRMR in terms of QDQD?

Select one:

a. P=20+1000QDP=20+1000QD ; MR=40+1000QDMR=40+1000QD

b. P=100020QDP=100020QD ; MR=100040QDMR=100040QD

c. P=100010QDP=100010QD ; MR=1000QD20QD2MR=1000QD20QD2

d. P=500.05QDP=500.05QD ; MR=500.1QDMR=500.1QD

1b)Which of the following equations is correct, based on the data above?

Select one:

a. ATC=Q23Q+536+1500QATC=Q23Q+536+1500Q

b. MC=0.5Q21.5Q+268MC=0.5Q21.5Q+268

c. AVC=Q33Q2+536Q+1500QAVC=Q33Q2+536Q+1500Q

d. AVC=Q29Q+536Q+1500

Q P TC 0 $1,000 $1,500 2 $960 $2,568 4 $920 $3,660 6 $880 $4,824 8 $840 $6,108 10 $800 $7,560 12 $760 $9,228 14 $720 $11,160 16 $680 $13,404 18 $640 $16,008 20 $600 $19,020 1. Determine equations for P f(Q.Q2) AVC = f (Q, Q2), MC = f(Q, Q2) Recall that your f(Q), MR = f(Q), ATC marginal equations should be derivatives of your totals!

Explanation / Answer

P at q = 0 is 1000 that means intercept of demand equation is 1000

At q =2, p = 1000 - bq

960 = 1000 - 2b

2b = 1000-960

B = 40/2 = 20

P = 1000 - 20q

Tr = p*q = 1000q - 20q^2

Mr = dTR / dQ

MR = 1000 - 40q

Answer is b.

Fc = tc at q =0, is 1500

TC = FC + VC

At q = 2, 2568 = 1500 + 2vc

2Vc = 2568-1500 = 1068

Vc= 1068/2 = 534

Tc = 1500 + 534q

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