Gatheru and Kabiru Certified Public Accountants have recently started to give business advise to their clients. Acting as consultants, they have estimated the demand curve of...

      

Gatheru and Kabiru Certified Public Accountants have recently started to give business advise to their
clients. Acting as consultants, they have estimated the demand curve of a clients firm to be;
AR=200-8Q
Where AR is average revenue in millions of shillings and Q is the output in units.
Investigation of the client firm‟s cost profile shows that marginal cost (MC) is given by:
MC=Q²-28Q+211(In million shillings)
Further investigations have shown that the firm‟s cost when not producing output is sh.10 million.
Required:
i) The equation of total cost
ii) The equation of total revenue
iii) An expression for profit.
iv) The level of output that maximizes profit
v) The equation of marginal revenue.

  

Answers

---

---

Mutiso answered the question on December 6, 2018 at 06:09

Next: Two CPA students were discussing the relationship between average cost and total cost. One student said that since average cost is obtained by dividing the cost...
Previous: XYZ Company Limited invests in a particular project and it has been estimated that after X months of running,

View More CPA Quantitative Analysis Questions and Answers | Return to Questions Index

Learn High School English on YouTube

Related Questions

---

• Two CPA students were discussing the relationship between average cost and total cost. One student said that since average cost is obtained by dividing the cost...(Solved)
  

  Two CPA students were discussing the relationship between average cost and total cost. One student said
  that since average cost is obtained by dividing the cost function by the number of units Q, it follows that the derivative of the average cost is the same as marginal cost, since the derivative of Q is 1.
  Required:
  Comment on this analysis.

  Date posted: December 6, 2018.  Answers (1)

• Demand function for a firm is given by P=12 - 0.4Q P is the price of the product, Q is the quantity demanded, and the total cost...(Solved)
  

  Demand function for a firm is given by
  P=12 - 0.4Q
  P is the price of the product, Q is the quantity demanded, and the total cost (C) is given by
  C = 5 + 4Q + 0.6Q²
  At what price and quantity will the firm have maximum profit? If the firm aims at maximizing sales, what
  price should it charge?

  Date posted: December 6, 2018.  Answers (1)

• A company is selling an item for ps= Sh.5. Profit is related to selling price p by P=50000_ps - 6250_ps 2 i ) Is the profit an increasing...(Solved)
  

  A company is selling an item for ps= Sh.5. Profit is related to selling price p by
  P=50000_ps - 6250_ps
  2
  i ) Is the profit an increasing function or a decreasing function when ps = 5?
  ii) If the price is changed to Sh.4.75, find whether profit would increase or decrease and find the change in
  profit.
  iii) At what price is the profit maximized?

  Date posted: December 6, 2018.  Answers (1)