Question

I'm in a crunch and I need to get this done in an hour any help is good help. My question has the same information as this http://openstudy.com/updates/5172921ae4b04b62aaef300f I'm stuck on the last two and I can't find help anywhere.

Answer 1

This is the work to the rest of it if it helps.

Answer 2

let MC be the marginal cost and MR be the marginal revenue

if you spend more money than you bring in ( MC > MR), then you are losing money and what's the point of buying more units?

if you are getting more money than you spend (MC < MR), then this means that you could go higher theoretically to get more profit which means you are NOT at the max potential (since you could go higher)

so this means that the max occurs when MC = MR


this is how I'm seeing it, I could be wrong

Answer 3

I think this project wants you to use data you used beforehand to prove it somehow

Answer 4

ie do a simulation

Answer 5

I get what you're saying the thing I'm having a the issue with is that it want me to relate it to the values i got when solving the other question and I just get confused.

Answer 6

Yeah so I guess i have to show why they have to equal each other. I don't know.

Answer 7

hmm how to tie those in, let me think

Answer 8

ok in #6, you found the max profit

Answer 9

so this the goal to reach since you know how high you can go according to these constraints

Answer 10

ok I see what you're saying. Thank you for the help. By any chance do you understand number 8?

Answer 11

the law of diminishing returns is the idea that if you add more and more workers, you'll eventually reach a point where they won't turn up a higher profit

example: you have 10 workers that make $10 profit

add 10 more workers you get $20 profit

add 10 more workers and you get $25 profit

you can't keep adding workers and getting more and more profit because money and resources are finite

eventually you'll reach a point where you reach the max profit and adding any more workers will cost you more money and you don't produce as much (eg: some workers may overlap and slow each other down)...so it's important to know where this line is

Answer 12

and for #7, I recommend looking at functions for MC and MR (however they're defined) and plug in values near the max profit and see what happens to MC and MR

you should numerically show with examples that the max profit occurs when MC = MR (roughly)

Answer 13

Great thank you =)

Answer 14

you're welcome