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Managerial Economics 7th Edition by Paul Keat ,Philip Young,Steve Erfle
Edition 7ISBN: 978-0133020267Managerial Economics 7th Edition by Paul Keat ,Philip Young,Steve Erfle
Edition 7ISBN: 978-0133020267 Exercise 3
Kelson Electronics, a manufacturer of DVRs, estimates the following relation between its marginal cost of production and monthly output:
MC = $150 + 0.005 Q
a. What does this function imply about the effect of the law of diminishing returns on Kelson's short-run cost function
b. Calculate the marginal cost of production at 1,500, 2,000, and 3,500 units of output.
c. Assume Kelson operates as a price taker in a competitive market. What is this firm's profit-maximizing level of output if the market price is $175
d. Compute Kelson's short-run supply curve for its product.
MC = $150 + 0.005 Q
a. What does this function imply about the effect of the law of diminishing returns on Kelson's short-run cost function
b. Calculate the marginal cost of production at 1,500, 2,000, and 3,500 units of output.
c. Assume Kelson operates as a price taker in a competitive market. What is this firm's profit-maximizing level of output if the market price is $175
d. Compute Kelson's short-run supply curve for its product.
Explanation
Verified
Verified
(a)
The law of diminishing return state...
Managerial Economics 7th Edition by Paul Keat ,Philip Young,Steve Erfle
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