SIM UOL August 2012 Intake

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-iMike-

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Deadpool. said:
AVC = q^2 + 4
TFC = 1
q = 20-p
TR = pq = q(20-q) = 20q - q^2

Profit n = TR - TFC - TVC
= (20q - q^2) - 1 - q(q^2 + 4)
= 20q - q^2 - 1 - q^3 - 4q
= 16q - q^2 - q^3 - 1

dn/dq = 16 - 2q - 3q^2
=0

3q^2 + 2q - 16 = 0
(3q+8)(q-2) = 0
q = -8/3 (NA) or 2

dn2/dq2 = -6q - 2
= -12 - 2
= -14
Therefore q = 2 is max profit.

q = 2,
profit n = 19
Click to expand...

wow. I am so embarassed with my lack of knowledge in maths. Thanks deadpool, although i still don't understand how to get. ):
 
ff8squall

ff8squall

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-iMike- said:
wow. I am so embarassed with my lack of knowledge in maths. Thanks deadpool, although i still don't understand how to get. ):
Click to expand...

AVC stands for average variable cost

FC stands for fixed cost

VC or TVC stands for variable cost

TC stands for total cost and TR stands for total revenue.

Profit in deadpool's case is n. and to get total revenue you get pq which means the amount you get from selling the good.

The differentiation part is to find and prove that the value is maximum.

Hope it helps

"Therefore q = 2 is max profit.

q = 2,
profit n = 19" q=2 gives the max profit, n is the max profit."
 
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freckles_ng

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WTS: OTIA TEXTBOOKS!!

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freckles_ng

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WTS:MACRO TEXTBOOK! [MANKIW]

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contact: ultimate_cruncher (hotmail.com)
 
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ahnic89

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I nid some help on this qns

An economy produces two goods, X and Y.
Labour are used to produce X and capital are use to produce Y.
A unit of labour can produce 1 unit of X and one unit of capital can produce 2 units of Y. There are 100 units of X and 50 units of capital in this economy.

The qns ask us to find the ppf. But then I cannot find the ppf as the labour constraint is vertical line and capital constraint is horizontal line. Therefore, I not sure whether there is ppf. Can anyone help??
 
chiwawa23

chiwawa23

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ahnic89 said:
I nid some help on this qns

An economy produces two goods, X and Y.
Labour are used to produce X and capital are use to produce Y.
A unit of labour can produce 1 unit of X and one unit of capital can produce 2 units of Y. There are 100 units of X and 50 units of capital in this economy.

The qns ask us to find the ppf. But then I cannot find the ppf as the labour constraint is vertical line and capital constraint is horizontal line. Therefore, I not sure whether there is ppf. Can anyone help??
Click to expand...

So u mean that L are not used to produce Y and K are not used to produce X??
 
chiwawa23

chiwawa23

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ahnic89 said:
I nid some help on this qns

An economy produces two goods, X and Y.
Labour are used to produce X and capital are use to produce Y.
A unit of labour can produce 1 unit of X and one unit of capital can produce 2 units of Y. There are 100 units of X and 50 units of capital in this economy.

The qns ask us to find the ppf. But then I cannot find the ppf as the labour constraint is vertical line and capital constraint is horizontal line. Therefore, I not sure whether there is ppf. Can anyone help??
Click to expand...

Wah, really straight line sia as L produce 100 units of x and K produce 100 units of y as well. Wow, maybe it means that down here there is no ppf as both straight lines meaning that can produce at maximum amount the whole area under the 2 straight lines le and no constraints leh. But not sure whether correct or not.
 
buffalow

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selling financial management textbook.

fundamentals of corporate finance by brealey/myers/marcus 6th edition

bought at $52++

selling it at $40

brand new condition, no highlighting, interested pls pm me.
 
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GeraldC90

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chiwawa23 said:
Wah, really straight line sia as L produce 100 units of x and K produce 100 units of y as well. Wow, maybe it means that down here there is no ppf as both straight lines meaning that can produce at maximum amount the whole area under the 2 straight lines le and no constraints leh. But not sure whether correct or not.
Click to expand...

If i'm not wrong it should look like a box. The contraints are y=100 and x=100 the PPF seems to be like only the point (100,100)
 
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