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Dsc1520 Assignment 3

This document contains calculations for revenue, costs, profit maximization, and production analysis. It includes formulas for total revenue, marginal revenue, total cost, average cost, marginal cost, marginal product, and average product of labor. The calculations are presented for various production scenarios involving demand curves, cost structures, profit functions, and output levels. The document provides solutions and optimal outputs or input levels for different maximization problems.

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166 views

Dsc1520 Assignment 3

This document contains calculations for revenue, costs, profit maximization, and production analysis. It includes formulas for total revenue, marginal revenue, total cost, average cost, marginal cost, marginal product, and average product of labor. The calculations are presented for various production scenarios involving demand curves, cost structures, profit functions, and output levels. The document provides solutions and optimal outputs or input levels for different maximization problems.

Uploaded by

Tiyani Mabunda
Copyright
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DSC1520 ASSIGNMENT 3

SEMESTER 2 2022

written by

BrightTutor

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CALCULATIONS

𝑅𝑒𝑣𝑒𝑛𝑢𝑒, 𝑇𝑅(𝑃) = 𝑑𝑒𝑚𝑎𝑛𝑑 × 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦


𝑇𝑅(𝑃) = 𝑄 × 𝑃
𝑇𝑅(𝑃) = (180 − 4𝑝) × 𝑝
𝑇𝑅 = 180𝑝 − 4𝑝2
𝑑
𝑀𝑅 = 𝑑𝑝 (𝑇𝑅) = 180 − 8𝑝

𝑂𝑝𝑡𝑖𝑜𝑛 𝐴

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CALCULATIONS
𝑅𝑒𝑣𝑒𝑛𝑢𝑒, 𝑅(𝑞) = 𝑑𝑒𝑚𝑎𝑛𝑑 × 𝑞𝑢𝑎𝑛𝑡𝑖𝑡𝑦
𝑅(𝑞) = 𝑃(𝑞) × 𝑞
𝑅(𝑞) = 150𝑞
𝑀𝑅(𝑞) = 𝑅 ′ (𝑞) = 150
𝑅(𝑞) 150𝑞
𝐴𝑅(𝑞) = 𝑞
= 𝑞
= 150

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CALCULATIONS
𝐶𝑜𝑠𝑡 = 15𝑞 + 3000
15𝑞
𝑀𝑐 =
3000𝑞

3000
𝑀𝑐 = 15 + 𝑞

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CALCULATIONS
300
𝐴𝐶 = 150 + 𝑞

𝑡𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 (𝑇𝐶)


𝐴𝐶 = 𝑞

𝑇𝐶 = 𝐴𝐶 × 𝑞
= 150𝑞 + 300
𝑇𝐶 = 300 + 150𝑞
𝑇𝐶 = 𝐹𝐶 + 𝑉𝐶
𝐹𝐶 = 300
𝑉𝐶 = 150𝑞
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CALCULATIONS
𝑇𝑜𝑡𝑎𝑙 𝑐𝑜𝑠𝑡 = 19𝑞 + 1 800
𝑇𝑜𝑡𝑎𝑙 𝑅𝑒𝑣𝑒𝑛𝑢𝑒 = 34𝑞
𝑑
𝑀𝑎𝑟𝑔𝑖𝑛𝑎𝑙 𝑐𝑜𝑠𝑡 = 𝑑𝑝 (19𝑞 + 1 800) = 19

𝑑
𝑀𝑎𝑟𝑔𝑖𝑛𝑎𝑙 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 = 𝑑𝑝 (34𝑞) = 34

𝑂𝑝𝑡𝑖𝑜𝑛 𝐴

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CALCULATIONS
𝑑𝑞
𝑀𝑃𝐿 = 𝑑𝑙
= 0 + 90𝑙 − 4.5𝑙 2

𝑀𝑃𝐿 = 90𝑙 − 4.5𝑙 2


𝑎𝑡 𝑙 = 15

𝑀𝑃𝐿 = 90 × 15 − 4.5 × 152


𝑀𝑃𝐿 = 337.5
𝑞 225 45𝑙 2 1.5𝑙 2
𝐴𝑃𝐿 = 𝑙
= 𝑙
+ 𝑙
− 𝑙
225
𝐴𝑃𝐿 = + 45𝑙 − 1.5𝑙 2
𝑙

𝑎𝑡 𝑙 = 15
225
𝐴𝑃𝐿 = 15
+ 45 × 15 − 1.5 × 152

𝐴𝑃𝐿 = 352.50

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𝑂𝑝𝑡𝑖𝑜𝑛 𝐴

CALCULATIONS

𝑐 = 𝑞 3 − 2𝑞 2 + 5𝑞 + 150

𝑝𝑞 = 196𝑞 − 9𝑞 2

𝑃(𝑥) = 196𝑞 − 9𝑞 2 − 𝑞 3 + 2𝑞 2 − 5𝑞 − 150


𝑃(𝑥) = 191𝑞 − 7𝑞 2 − 𝑞 3 − 150

𝑃′ (𝑥) = 191 − 14𝑞 − 3𝑞 2


𝑃′ (𝑥) = 0
−3𝑞2 − 14𝑞 + 191 = 0
Solve with quadratic formula
−(−14)±√(−14)2 −4(−3)(191)
2(−3)

7+√622 √622−7
𝑞=− 3
, 𝑞= 3

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CALCULATIONS
𝑇𝑅 = 𝑃 × 𝑄
= 𝑃 × (20 − 0.01𝑃)

= 20𝑝 − 0.01𝑝2
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CALCULATIONS

𝑄 = 300√𝑙 − 4𝑙
𝑀𝑎𝑟𝑔𝑖𝑛𝑎𝑙 𝑝𝑟𝑜𝑑𝑢𝑐𝑡
𝑑𝑄
𝑀𝑃 = 𝑑𝑙
1 150
𝑀𝑃 = 300 2 𝑙 − 4 = − 4
√ √𝑙

𝑖𝑓 𝑙 = 9, 𝑡ℎ𝑒𝑛
150
𝑀𝑃 = −4 = 46
√9

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CALCULATIONS
𝑃𝑟𝑜𝑓𝑖𝑡 = 𝑇𝑅 − 𝑇𝐶

𝑃𝑟𝑜𝑓𝑖𝑡 = (20𝑞 − 4𝑞 2 ) − (16 − 𝑞 2 )

𝑃𝑟𝑜𝑓𝑖𝑡 = −3𝑞2 + 20𝑞 − 16


To maximize profit we must have:
𝑑𝑝
=0
𝑑𝑞

−6𝑞 + 20 = 0
20 10
𝑄= 6
= 3

3.333 𝑢𝑛𝑖𝑡𝑠
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