ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter D, Problem 15P
To determine
To calculate: the net costs to the students.
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A company produces and sells a consumer product and is able to control the demand by varying the selling price. The
approximate relationship between price and demand is
2700
5000
p = 38 +
(for D>1)
D²
The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $ 40 per unit. What is
the number of units and total amount that should be produced and sold each month to maximize profit?
The profit of a company, in dollars, is the difference between the company's revenue and cost. The cost, C(x), and revenue, R(x), are functions for a particular
company. The x represents the number of items produced and sold to distributors.
C(x) = 2500 + 60x
R(x) = 800x - x?
a) Determine the maximum profit of the company.
The maximum profit of the company is
b) Determine the number of items that must be produced and sold to obtain the maximum profit.
The number of items that must be produced and sold to obtain the maximum profit is
1. Exercise 9.1
A study of 86 savings and loan associations in six northwestern states yielded the following cost
function.
2.38
0.006153Q
0.000005359Q²
19.2X1
C
+
+
(2.62)
(2.84)
(3.16)
(3.50)
where C = average operating expense ratio, expressed as a percentage and defined as total
operating expense ($ million) divided by total assets ($ million) times 100 percent.
Q = output; measured by total assets ($ million)
X1 = ratio of the number of branches to total assets ($ million)
Note: The number in parentheses below each coefficient is its respective t-statistic.
Which of the variable(s) is (are) statistically significant in explaining variations in the average
operating expense ratio? (Hint: t0.025,7€ 1.99
.) Check all that apply.
X1
Q2
What type of average cost-output relationship is suggested by these statistical results?
Quadratic
Linear
Cubic
Based on these results, what can we conclude about the existence of economies or diseconomies
of scale in savings and loan associations in…
Chapter D Solutions
ENGR.ECONOMIC ANALYSIS
Ch. D - Prob. 1PCh. D - Prob. 2PCh. D - Prob. 3PCh. D - Prob. 4PCh. D - Prob. 5PCh. D - Prob. 6PCh. D - Prob. 7PCh. D - Prob. 8PCh. D - Prob. 9PCh. D - Prob. 10P
Ch. D - Prob. 11PCh. D - Prob. 12PCh. D - Prob. 13PCh. D - Prob. 14PCh. D - Prob. 15PCh. D - Prob. 16PCh. D - Prob. 17PCh. D - Prob. 18PCh. D - Prob. 19PCh. D - Prob. 20PCh. D - Prob. 21PCh. D - Prob. 22PCh. D - Prob. 23PCh. D - Prob. 24PCh. D - Prob. 25PCh. D - Prob. 26PCh. D - Prob. 27PCh. D - Prob. 28PCh. D - Prob. 29PCh. D - Prob. 30PCh. D - Prob. 31PCh. D - Prob. 32PCh. D - Prob. 33PCh. D - Prob. 34PCh. D - Prob. 35PCh. D - Prob. 36PCh. D - Prob. 37PCh. D - Prob. 38PCh. D - Prob. 39PCh. D - Prob. 40PCh. D - Prob. 41PCh. D - Prob. 42PCh. D - Prob. 43PCh. D - Prob. 44PCh. D - Prob. 45PCh. D - Prob. 46PCh. D - Prob. 47PCh. D - Prob. 48PCh. D - Prob. 49PCh. D - Prob. 50PCh. D - Prob. 51PCh. D - Prob. 52PCh. D - Prob. 53PCh. D - Prob. 54PCh. D - Prob. 55PCh. D - Prob. 56PCh. D - Prob. 57PCh. D - Prob. 58PCh. D - Prob. 59PCh. D - Prob. 60PCh. D - Prob. 61PCh. D - Prob. 62PCh. D - Prob. 63PCh. D - Prob. 64PCh. D - Prob. 65PCh. D - Prob. 66PCh. D - Prob. 67PCh. D - Prob. 68PCh. D - Prob. 69PCh. D - Prob. 70PCh. D - Prob. 71PCh. D - Prob. 72PCh. D - Prob. 73PCh. D - Prob. 74PCh. D - Prob. 75PCh. D - Prob. 76PCh. D - Prob. 77PCh. D - Prob. 78PCh. D - Prob. 79PCh. D - Prob. 80PCh. D - Prob. 81PCh. D - Prob. 82PCh. D - Prob. 83PCh. D - Prob. 84PCh. D - Prob. 85PCh. D - Prob. 86PCh. D - Prob. 87PCh. D - Prob. 88PCh. D - Prob. 89PCh. D - Prob. 90PCh. D - Prob. 91PCh. D - Prob. 92PCh. D - Prob. 93PCh. D - Prob. 94PCh. D - Prob. 95PCh. D - Prob. 96PCh. D - Prob. 97PCh. D - Prob. 98PCh. D - Prob. 99PCh. D - Prob. 100PCh. D - Prob. 101PCh. D - Prob. 102PCh. D - Prob. 103PCh. D - Prob. 104PCh. D - Prob. 105PCh. D - Prob. 106PCh. D - Prob. 107PCh. D - Prob. 108PCh. D - Prob. 109PCh. D - Prob. 110PCh. D - Prob. 111PCh. D - Prob. 112PCh. D - Prob. 113PCh. D - Prob. 114PCh. D - Prob. 115PCh. D - Prob. 116PCh. D - Prob. 117PCh. D - Prob. 118PCh. D - Prob. 119PCh. D - Prob. 120PCh. D - Prob. 121PCh. D - Prob. 122PCh. D - Prob. 123PCh. D - Prob. 124PCh. D - Prob. 125PCh. D - Prob. 126PCh. D - Prob. 127PCh. D - Prob. 128PCh. D - Prob. 129PCh. D - Prob. 130PCh. D - Prob. 131PCh. D - Prob. 132PCh. D - Prob. 133PCh. D - Prob. 134PCh. D - Prob. 135PCh. D - Prob. 136PCh. D - Prob. 137PCh. D - Prob. 138PCh. D - Prob. 139P
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