a.

To maximize profit, firm produce the output at

P = MC(Q)
Therefore, the firm should produce 7 products

b. To maximize profit, firm produce the output at

P = MC(Q)
Therefore, the price of product is $28

c. If the firm produce 7 products

TC = ATC x Q
= $32 x 7
= $224

d. If the firm produce 7 products

VC = AVC x Q
= $14 x 7
= $98

e. If the firm produce 7 products

FC = AFC x Q
= $18 x 7
= $126

f. Loss = (P – ATC) x Q
= (28 – 32) x 7
= -$28

g. If the firm’s shuts down, the firm need to pay for fixed cost which is $126
 h. The firm should shut down the business, because the product price is lower than the ATC

MC(Q) = 10 + 4Q

a. MC = P
MC(Q) = 10 + 4Q
90 = 10 + 4Q
Q = 20

b. Since the firm in a perfectly competitive market, it should charge the price the same as other
firms which is $90

c. π=PQ−C (Q )
π=( 90 )( 20 )−1050
π=$ 750

d. In the long run, if the business gains profit more firm will enter. Therefore, the prices will fall
and the output need to be reduced and at the profit will end at breakeven point.
a. To maximize profit, firm produce the output at
MR(Q*) = MC(Q*)
Therefore, the firm should produce 7 products

b. The firm optimum price is at

P* = P(Q*) -> lihat dari kurva demand
Therefore, the price is $130

c. Profit = (P – ATC) x Q
= (130 – 110) x 7
= $140

d. If new competitor enters the market, the demand and profit will decrease over time
a. MC = 4Q

MR = a+2BQ
= 300 – (2)(3)(Q)
= 300 – 6Q

To maximize profits, MR = MC then

4Q = 300 – 6Q

Q = 30

P(30) = 300 – 3(30)

= $210

b. π=PQ−C (Q )
π=(210)(30)−3300
π=$ 3000

1+ E
c. MR=P( )
E
1+ E
120=210( )
E
1+ E
0.57=
E
0.57 E=1+ E
E=−2.326
Demand is elastic

d. To maximize revenue, MR = 0 then

MR =0
300 – (2)(3)(Q) = 0
300 – 6Q =0
Q = 50

P(50) = 300 – 3(50)

= $150
e. π=PQ−C (Q )
π=(150)(50)
π=$ 7 500

1+ E
f. MR=P( )
E
1+ E
0=150( )
E
1+ E
0=
E
E=−1
Demand is unitary elastic