Laura's Internet Services Has the Following Short-Run Cost Curve

question 137

Essay

Laura's internet services has the following short-run cost curve: where q is Laura's output level, K is the number of servers she leases and r is the lease rate of servers. Laura's short-run marginal cost function is: Currently, Laura leases 8 servers, the lease rate of servers is $15, and Laura can sell all the output she produces for $500. Find Laura's short-run profit maximizing level of output. Calculate Laura's profits. If the lease rate of internet servers rise to $20, how does Laura's optimal output and profits change?

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Definitions:

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The process of examining individuals, typically in a school or childcare setting, for the presence of head lice as a measure of hygiene and to prevent outbreaks.

Head Lice

Parasitic insects that live on human scalps and feed on blood, causing itching and discomfort.

Logical Gap

A flaw or disconnect in an argument where the conclusion does not logically follow from the premises.

Implicit Premise

An underlying assumption that is not explicitly stated but is necessary for an argument's conclusion to be valid.