Children were observed during lunch over several months to determine the amount of food consumed versus the time in minutes. A c
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Answer:
In equilibrium, total output by the two firms will be option e= 300.
Q = +
Q = 100 + 200
Q = 300
Explanation:
Data Given:
Market Demand Curve = P = 1660-4Q
where, P = price and Q = total industry output
Each firm's marginal cost = $60 per unit of output
So, we know that Q = +
where being the individual firm output.
Solution:
P = 1660-4Q
P = 1660- 4( +
)
P = 1660 - 4 - 4
Including the marginal cost of firm 1 and multiplying the whole equation by
Let's suppose new equation is X
X = 1660 - 4
- 4
- 60
Taking the derivative w.r.t to , we will get:
= 1660 - 8
- 4
- 60 = 0
Making rearrangements into the equation:
8 +
= 1660 - 60
8 +
= 1600
Dividing the whole equation by 4
2 +
= 400
Solving for
2 = 400 -
= 200 - 0.5
Including the marginal cost of firm 1 and multiplying the whole equation by
P = 1660 - 4 - 4
Let's suppose new equation is Y
Y = 1660 - 4
-4
- 60
Pugging in the value of
Y = 1660 - 4
(200 - 0.5
) -4
- 60
Y = 1660 - 800
+2
-4
- 60
Y = 1600 - 800
-2
Taking the derivative w.r.t
= 1600 - 800 - 4
= 0
Solving for
4 = 800
= 200
= 200 - 0.5
Plugging in the value of to get the value of
= 200 - 0.5 (200)
= 200 - 100
= 100
Q = +
Q = 100 + 200
Q = 300
Hence, in equilibrium, total output by the two firms will be option
e= 300.
Answer:
60 percent
Explanation:
Contribution margin refers to the revenue a firm derives after deducting the variable cost it has incurred.
Contribution margin = Sales - Variable costs
Contribution margin or contribution to sales ratio represents the percentage of contribution a firm earns from the sale of it's output.
It is represented mathematically as,
=
Also, contribution margin ratio = 100 - variable cost ratio percentage.
Hence, contribution margin for three departments would be:
A = 100 - 30% = 70%
B = 100 - 40% = 60%
C = 100- 50% = 50%
This represents if sales revenue is 100, contribution margin earned is 70, 60 and 50 under three cases.
Since sales revenue in all three departments is the same, let us assume the sales revenue of a department as y.
Thus, weighted average contribution margin would be, 60 percent