If Fixed Costs Are 30, Variable Costs Per Unit Are

question 7

Multiple Choice

If fixed costs are 30, variable costs per unit are Q + 3, and the demand function is P + 2Q = 50
Which of the following gives the formula for the associated profit?

• A)47Q - 2Q2 + 33
• B)47Q - 3Q2 - 30
• C)49Q - 2Q2 + 33
• D)49Q - 2Q2 - 33
• E)53Q - 3Q2 + 30

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Definitions:

Returns To Scale

Describes how output changes in response to a proportional change in all input factors used in production.

Production Function

This concept illustrates how varying amounts of input factors affect the level of production output, showcasing how efficiency can be maximized with certain combinations of inputs.

Output

The quantity of goods or services produced in a given time period by a firm, industry, or country.

Production Function

A mathematical model that describes the relationship between input resources and the output of goods or services produced.