Purchase Solution

Lagrangian Multipliers

Not what you're looking for?

Ask Custom Question

Fixed capital and labor expenses are $1.2 million per year.
Variable expenses average $2,000 per van conversion.
Q=1,000 - 0.1P where Q is the number of van conversions (output) and P is price.
Calculate the profit maximizing output, price and profit levels.

Purchase this Solution

Solution Summary

Calculate the profit maximizing output, price and profit levels.

Solution Preview

Fixed cost = 1,200,000
Unit Variable cost = 2000
So the cost function is TC = FC + VC = 1200,000 + 2000 Q
Then marginal cost = AVC = 2000

Since Demand is Q ...

Purchase this Solution


Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.