You are given the following data for your firm, which sells high-capacity video

Question

You are given the following data for your firm, which sells high-capacity video MP3 players.

Q P TC

0 78 $100,000

1,000 76 $125,500

2,000 74 $144,000

3,000 72 $158,500

4,000 70 $172,000

5,000 68 $187,500

6,000 66 $208,000

7,000 64 $236,500

8,000 62 $276,000

9,000 60 $329,500

10,000 58 $400,000

Determine equations for P = f(Q), MR= f(Q), ATC = f(Q,Q2), AVC=f(Q,Q2),MC=f(Q,Q2). Recall that your marginal equations should be derivatives of your totals!

Please show your work, and in a simple way. I want to learn how to do this. Thank you!!

Explanation / Answer

Ans.

From the graph plot, we have the following equations:

P=f(Q) = 78 - 0.002Q

MR=f(Q) = 78 - 0.004Q

ATC=f(Q, Q2) = (100000/q + 1.4 + 0.0025q)

AVC=f(Q, Q2) = 1.4 + 0.0025q

MC=f(Q, Q2) = 2.8 + 0.005q

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