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MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
You are newly appointed as a consultant in a bakery. Acting as a consultant you have estimated the demand curve of a client's firm to be AR = 400 - 16x where AR is average revenue (in rupees) and x is output. Investigation of the client firm's cost profile shows that the marginal cost is given by: MC = 14x + 111 where MC is marginal cost (in rupees). Further investigation has shown that the firm's cost when no production are $100.
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(a) Find equation of total cost.
(6 marks)
Â
(b) If total revenue is average revenue multiplied by output, find the equation of total revenue.
(2 marks)
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(c) Use the methods of differentiation, find the turning point(s) of the firm's profit curve and say whether these point(s) are maxima or minima.
(8marks)
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(d) Find the break-even points of the bakery.
(4 marks)
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