06-16-2011, 10:56 PM
Question no.1:
Suppose you are working in a mobile making firm operating in a perfectly
Competitive market. Your cost of production is given by:
TC = 5000 + Q2
Where Q is the level of output and TC is total cost. The fixed cost of production is
Rs.5000.
a. If the price of a mobile is Rs.7200, how many mobiles should you produce to
Maximize profit?
b) What will your profit level be?
(Marks = 6 + 6)
Question no.02:
If a sales tax of Rs.50 per unit of output is placed on one firm whose product sells for
Rs.500 in a competitive industry.
What will happen to price, output and profit?
(Marks = 03)
Suppose you are working in a mobile making firm operating in a perfectly
Competitive market. Your cost of production is given by:
TC = 5000 + Q2
Where Q is the level of output and TC is total cost. The fixed cost of production is
Rs.5000.
a. If the price of a mobile is Rs.7200, how many mobiles should you produce to
Maximize profit?
b) What will your profit level be?
(Marks = 6 + 6)
Question no.02:
If a sales tax of Rs.50 per unit of output is placed on one firm whose product sells for
Rs.500 in a competitive industry.
What will happen to price, output and profit?
(Marks = 03)