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

question 115

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?

---

Definitions:

Accountable Plan

This is an IRS-recognized plan that allows businesses to reimburse employees for work-related expenses tax-free, provided certain conditions are met, such as business connection and adequate accounting.

Taxable Fringe Benefits

Benefits provided by an employer to an employee, which are considered taxable income for the employee, such as personal use of a company car.

FUTA Tax

Federal Unemployment Tax Act tax, a payroll tax paid by employers to fund state workforce agencies and unemployment insurance for workers who have lost their jobs.

State Unemployment Taxes

Taxes imposed by state governments on businesses based on the amount of wages paid to employees, used to fund unemployment compensation benefits for workers who have lost their jobs.