9. Suppose that the firm's cost function is given in the following schedule (where Q is the level of output).
Q (units) Total Cost
11. The British Automobile Company is introducing a brand new model called the "London Special." Using the latest forecasting techniques, BAC economists have developed the following demand function for the "London Special":
(Solve using either point or arc elasticity. Consider solving for demand in the two possible price levels. Is this an elastic or inelastic product: do you have pricing power?)
QD = 1,200,000 - 40P
What is the point price elasticity of demand at prices of:
12. Given the following demand function:
Q = 2.0 P1.33 Y2.0 A0.50
(What is the Advertising Elasticity of Demand? Does advertising work to increase demand?)
Q = quantity demanded (thousands of units)
P = price ($/unit)
Y = disposable income per capita ($ thousand)
A = advertising expenditures ($ thousand)
Determine the following when P = $2/unit, Y = $8 (i.e., $8000), and A = $25 (i.e., $25,000)
a. Price elasticity of demand
b. The approximate percentage increase in demand if disposable income percentage increases by 3%.
c. The approximate percentage increase in demand if advertising expenditures are increased by 5 percent.
If P=$50 and 2=$14500, how many workers should the firm hire to maximize profits?
These 3 economics questions cover marginal and total cost schedules, point price and advertising elasticity of demand and profit maximization hiring in an attached 3 page Word document.