Economic profits (or loss) is defined as the difference between revenues and the opportunity cost forgone. In the current case, the entrepreneur opted to start a business rather than being employed.
Therefore;
Economic profit = Revenues - Opportunity cost
In this problem;
Revenues = $300,000 - $150,000 - $25,000 - $25,000 = $100,000
Opportunity cost = $75,000
Therefore;
Economic profit = $100,000 - $75,000 = $25,000
Answer: Profit of charging the optimal block price is 73.5 cent or $0.74.
Explanation:
Given that,
The inverse demand function: P = 25 − 3Q (in cents)
Cost of producing = C(Q) = 1 + 4Q (in cents)
By charging the optimal block price, the firm produce at a point where
Price = Marginal Cost (MC)
MC = 4
Therefore,
25 − 3Q = 4
Q = 7
Consumer Surplus = Profit of charging the optimal block price=0.5 × (y-intercept of the demand curve -MC) × Q
= 0.5(25 - 4) × 7
= 73.5 cent
It is equivalent to $0.74.
Answer:
The answer is explained below
Explanation:
The companies board of directors as well as you would consider whether it is best to install the scubber system. When determining whether to install the scubber system both short and long term consequences are to be considered. If presently, the level of pollution is legal, you need to consider if in the future it would be legal? if the installation of the scubber system would affect the public relations of the company. After considering all this, it would be better to install because the pollution can lead to death, and the neighborhood can sue the company. Also the EPA regulations can be regulated.
