Ty's Sporting Goods is considering rewarding employees with profit sharing for good performance.Without the sharing plan,Ty's total cost function is: TC(Q)= 250Q + and his marginal cost function is: MC(Q)= 250 + .Ty can sell all his output for $500.Calculate Ty's optimal output level.What is his level of profits? If Ty implements the profit sharing plan,his total cost function is: TC(Q)= 125Q + and his marginal cost function is:
MC(Q)= 125 + .If the profit sharing plan entitles his employees to 25% of the profits,should Ty institute the plan?

Question

Ty's Sporting Goods is considering rewarding employees with profit sharing for good performance.Without the sharing plan,Ty's total cost function is: TC(Q)= 250Q +  and his marginal cost function is: MC(Q)= 250 +  .Ty can sell all his output for $500.Calculate Ty's optimal output level.What is his level of profits? If Ty implements the profit sharing plan,his total cost function is: TC(Q)= 125Q +  and his marginal cost function is:
MC(Q)= 125 +  .If the profit sharing plan entitles his employees to 25% of the profits,should Ty institute the plan?

Quizplus · Accepted Answer

The Answer of Ty's Sporting Goods is considering rewarding employees with profit sharing for good performance.Without the sharing plan,Ty's total cost function is: TC(Q)= 250Q +  and his marginal cost function is: MC(Q)= 250 +  .Ty can sell all his output for $500.Calculate Ty's optimal output level.What is his level of profits? If Ty implements the profit sharing plan,his total cost function is: TC(Q)= 125Q +  and his marginal cost function is:
MC(Q)= 125 +  .If the profit sharing plan entitles his employees to 25% of the profits,should Ty institute the plan?

Ty's Sporting Goods Is Considering Rewarding Employees with Profit Sharing