Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Textbook problems worked out

432 views

Published on

These slides show some of the more difficult problems from the text worked out in detail with all the steps included. The text leaves out many key steps

Published in: Education
  • Be the first to comment

  • Be the first to like this

Textbook problems worked out

  1. 1. Examples of Problems from Text• Below are three problems worked out from the textbook with all of the steps included. Since the textbook leaves out many of the key steps in these examples I have worked them out for you.
  2. 2. Problems 8-5• P = 100 – 2Q• C(Q) = 10 + 2Q• Total Revenue = Price * Quantity• P * Q = Q (100 -2Q)• TR = 100Q – 2Q2• MR = 100 – (2) 2Q2-1• MR = 100 – 4Q• C(Q) = 10 + 2Q• Marginal Cost = MC• MC = 2• MR = MC to maximize profits• 2 = 100 – 4Q• 4Q = 98• Q = 24.5• P = 100 – 2Q• P = 100 – 2 (24.5)• P = 51• Profit = TR – TC• Profit = (24.5*51) – (10 + 2*24.5)• Profit = 1190.50
  3. 3. Problem 8-6• P(Q) = 70-.5Q• MC1 = 3Q1• MC2 = Q2• Total Revenue = Price * Quantity• P* Q = Q (70-.5Q)• TR = 70Q-.5Q2• MR = 70 – (2).5Q2-1• MR = 70 – Q• Q = Q 1 + Q2• Substitute so:• MR = MC• 70 – (Q1 +Q2) = 3Q1• 70 – (Q1 +Q2) = Q2• So• 70 – 3Q1 - Q1 -Q2 = 0• 70 – 4Q1 = Q2• Substitute into other Equation• 70 – (Q1 + 70 – 4Q1) = 70 – 4Q1• 70 – Q1 - 70 + 4Q1 = 70 – 4Q1• 3Q1 = 70 – 4Q1• 7Q1 = 70• Q1 = 10• Solve for Q2 in other equation• 70 – (Q1 +Q2) = 3Q1• 70 – (10 +Q2) = 3(10)• 70 – 10 – Q2 = 30• 60 – Q2 = 30• 30 – Q2 = 0• 30 = Q2• Q = Q1 + Q2• Q = 10 + 30• Q = 40• Price• P(Q) = 70-.5Q• P(Q) = 70-.5 (40)• P(Q) = 70-20• P(Q) = 50
  4. 4. Problem 8-7• P = 100 – 2Q• C(Q) = 5 + 2Q• Total Revenue = Price * Quantity• P * Q = Q (100 -2Q)• TR = 100Q – 2Q2• MR = 100 – (2) 2Q2-1• MR = 100 – 4Q• C(Q) = 5 + 2Q• Marginal Cost = MC• MC =2• MR = MC to maximize profits• 2 = 100 – 4Q• 4Q = 98• Q = 24.5• P = 100 – 2Q• P = 100 – 2 (24.5)• P = 51• Profit = TR – TC• Profit = (24.5*51) – (5 + 2*24.5)• Profit = 1195.50

×