A Consulting Company Estimated Market Demand and Supply in a Perfectly

question 63

Multiple Choice

A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results: $Q _ { \mathrm { d } } = 25,000 - 5,000 P + 25 M$ $Q _ { s } = 240,000 + 5,000 P - 2,000 P _ { J }$ where P is price,M is income,and $P _ { I }$ is the price of a key input.The forecasts for the next year are $\hat { M }$ = $15,000 and $\hat { P } _ { I }$ = $20.Average variable cost is estimated to be $A V C = 14 - 0.008 Q + 0.000002 Q ^ { 2 }$ Total fixed cost will be $6,000 next year.What is the profit-maximizing output choice for the firm?

• A)3,000 units
• B)4,000 units
• C)5,000 units
• D)6,000 units

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Definitions:

Industrial Societies

Societies characterized by a reliance on mechanized labor to create goods, leading to high levels of urbanization and complex social structures.

Predictability

The ability to accurately forecast future events or trends based on current or past data.

Social Institutions

Organized structures and systems in society that dictate certain patterns of behavior and relationships, such as family, education, religion, and economy.

Impact

The action of one object coming forcibly into contact with another, or a marked effect or influence of something.