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The document outlines a series of economic and mathematical problems related to marginal revenue, cost functions, optimization of profit, utility maximization, and production functions. Each question requires specific calculations and analysis to determine optimal levels of output, pricing, and profit for various scenarios involving monopolistic firms and competitive markets. The problems cover a range of topics including demand functions, total cost functions, and critical value computations.

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minemy214
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3 views

Assgme

The document outlines a series of economic and mathematical problems related to marginal revenue, cost functions, optimization of profit, utility maximization, and production functions. Each question requires specific calculations and analysis to determine optimal levels of output, pricing, and profit for various scenarios involving monopolistic firms and competitive markets. The problems cover a range of topics including demand functions, total cost functions, and critical value computations.

Uploaded by

minemy214
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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ASSIGNMENT

 Answer each question in clear and precise that directly address the
questions.
1. Find MR if Q= 10-2P If Q= 2unit?
2. If R (Q) = -3Q2 +6Q+24 Find the level of output where the MR is maximum and the
total revenue at that level of output?
3. If C(Q)= 4Q2+2Q+8 Find MC and AC if Q= 6 unit?
4. If Q= 6000-30P and P= 200-0.03Q and total cost TC= 72000+60Q, Then find profit
maximize level of output?
5. If Q= 90L2/3 K1/3 find MPL and MPK if L=81 and K= 27
6. Optimize: y  3 x 12  5 x 1  x 1 x 2  6 x 22  4 x 2  2 x 2 x 3  4 x 32  2 x 3  3 x 1 x 3 , .

a) Compute the critical values using F.O.C.


b) Calculate the relative extreme values using S.O.C.
7. A monopolistic firm produced two goods. The demand and total cost
functions are given:
Q1  100  2 p 1  2 p 2

Q2  75  0 . 5 p1  p2

TC  Q 12  2 Q 1 Q 2  Q 22

Then optimize the firms profit function by:


a) Finding the inverse demand function.
b) Find profit maximizing level of prices and outputs using FOC
c) Compute the maximum profit of the firm using second derivatives
8. Minimize a firm’s total cost:
c  45 x 2  90 xy  90 y 2 , When the firm has to meet a production quota:
2x  3 y  60 , :
a) Find the cost minimizing input mix (the critical values)
b) Compute the minimum cost of the firm.
9. A monopolist firm produces two substitute goods and faces the following
demand functions.

1
X  80  P x  2 p y

y  110  2 p x  6 p y

Its total cost function is: TC  0 . 5 x 2  xy  y


2

What is the profit maximizing level of output if the firm has to meet a production
quota of 3x  4 y  350 ?

10. Maximize utility: u x, y   x


0 . 25
y
0 .4
, subject to , 2 x  8 y  104 .
11. If the utility function for two commodities is u=x2y and the budget constraint
is 4x+5y=60, then find the values of x and y that maximize utility.
12. A firm produces two products x & y. the cost of producing the products is :
c( x, y )  0 . 04 x 2  0 . 01 xy  0 . 01 y 2  4 x  2 y  500 . Suppose that the firm sells all its
output at a per unit price of birr 15 for X, and birr 9 for y. optimize the profit
function of the firm.

13. The production function for product Q is given by: Q  f L , K   6 K


3
L . Let
the price per unit of output be birr 0.5. The cost per unit of capital is birr 0.1 and
the price per unit of labor be birr 1. Optimize the profit function of the firm?
14. Consider a profit maximizing firm that sales its output Q at a constant unit
price, P and purchases two inputs X1& X2 at constant unit factor prices w1&w2
respectively. The firm faces competitive input & output market and the
production function is given by: Q X 1, X 2
. then optimize the profit function of the
firm and provide economic interpretation of the first & second order conditions.
15.Consider a monopolist firm that produces two products Q1& Q2. Suppose that
the demands facing the firm are as follows:
P1  55  Q 1  Q 2
P2  70  Q 1  2 Q 2

The total cost function is given by: c Q 1 , Q 2   Q 1  Q 1Q 2  Q 22 , then optimize the


2

profit function of the firm and determine the optimal levels of output, price and
profit.
16. Suppose a monopolist firm sales a certain product Q in three separate
markets. The demands facing the firm are as follows.

2
P1  63  4 Q 1
P2  105  5 Q 2
P3  75  6 Q 3

The total cost function is: C Q   20  15 Q

Where Q  Q1 Q 2 Q 3

Then optimize the profit function in of the firm, i.e. determine the prices charged,
the quantities sold as well as the optimal profit.
17. The total revenue for a commodity is described by R(x) = 300x – 0.02x2 .
What is the marginal revenue when 50 units are sold and interpret your result?
18. Suppose the total cost function for the production of x units of a product is
given by: Tc=2x+120
a. Find the instantaneous rate of change of average cost with respect to the
number of units produced.
b. Find the level of production at which this rate of change equals zero.
19. The profit from the sale of x stereos per month for a certain company. is
given by:
π = 800 –x2 + 0. 2x2
Find the rate of change in the monthly profit for 100 stereos.

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