Explore BrainMass
Share

# Determining Profit Maximizing Quantity

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Your family operates a car wash. There are many other car washes around. You have observed that the customers care only about finding the cheapest price for car washes; they do not care which company they use. To purchased the equipment and the building for the car wash, your have to take out a small business loan. The cost of the loan comes to \$10 per day for the next 40 years. The business must hire labor and purchase cleaning solutions, car wax, etc. to operate the car wash. After some research you have figured out that the cost for labor and supplies is VC(Q)=Q², where Q is the number of car wash.

a. You have observed that you can charge a price of \$10.00 per car wash. How many car wash should you sell to maximize the profit?
b. You have observed that you can charge a price of \$6.00 per car wash. How many car wash should you sell to maximize the profit?
c. You have observed that you can charge a price of \$2.00 per car wash. How many car wash should you sell to maximize the profit?

https://brainmass.com/economics/short-and-long-run-cost-functions/determining-profit-maximizing-quantity-583516

#### Solution Summary

This solution helps to find out profit maximizing quantity.

\$2.19
Similar Posting

## Economics - Market Structures

(1) Global Investment Group operates in a perfectly competitive industry with the following Cost and Revenue data:

Average Total Cost = \$2.50; Quantity sold = 9000 Units; Price Per Unit = \$3.50; Marginal Revenue = \$3.50; Marginal Cost = \$3.50:

(a) What is the loss minimizing output level for the firm?

(b) What is the Average Profit or Loss for the firm?

(c) What is the Total Profit or Loss for the firm?

(2) Global Marketing Group operates in a monopolistic competitive industry with the following Cost and Revenue data:

Average Total Cost = \$5.00; Quantity sold = 5000 Units; Price Per Unit = \$9.00; Marginal Revenue = \$4.00; Marginal Cost = \$4.00:

(a) What is the profit maximizing output level for the firm?

(b) What is the Average Profit or Loss for the firm?

(c) What is the Total Profit or Loss for the firm?

View Full Posting Details