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Application Of Differentiation To Economics

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Obj100

1. If the demand law is given by , show that total revenue increases while marginal revenue decreases , continuously , a s output increases .Show that the marginal revenue is always positive and thus, the demand curve is elastic at every point .Verify this result by finding the elasticity of demand of the given demand function. 2. A firm faces a demand schedule p=1200-9x and its production function is x=L1/3 ,where L is labour . Find the marginal revenue product of labour when firm employs 64 workers. 3. The short-run total cost function of a firm is estimated to be C = 100+1.5x-.001x2. Assuming that the variable factor is purchased from a perfectly competitive market, show that this cost function is not consistent with the law of diminishing returns 4. Given a firms production function x=50+30L-L2 and its average revenue function AR=1200-3x.

a) Find MPL and the value of L at which MPL =0. b) Does the production function show Diminishing marginal productivity of labour c) Write down an expression of MRPL as a function of L and find its value when L =10.

Obj101

5. Total cost of a manufacturer is C= 5000+1000q-500q2+ . a) Find the MC function b) Find the expression for the slope of the MC curve c) Find the Average total cost function d) At what value of q does MC = AVC ? 6. The total cost of producing x units of a commodity is given by C= 500x2+2500x+5000, find a) MC when x units are produced b) MC when x =100,150 c) Average cost when x units are produced d) Average cost when x=100,150

7. The total cost C(x) of a firm is C(x)=.005x3-.02x2-30x+5000 where x is output .Determine: a) The average cost b) The marginal average cost c) The marginal cost d) The rate of marginal average cost e) The value of x for which MVC=AVC

Obj102

8. If the total cost function is given by C =a+bx+cx2, where x is the quantity of output ,show that

Obj103

9. The average cost function (AC) for a commodity is given by AC= where x is the output . find the output for which AC is increasing and the output for which AC is decreasing , with increasing output . Also find TC AND MC. 10.Find the marginal revenue product for a monopolist confronted with demand x=10-2p 11.A firm knows that the demand function for one of its products is linear .It also knows that it can sell 1000 units when the price is Rs.4 per unit , and it can sell 1500 units when the price is Rs.2 a unit .Determine Demand function,TR,AR,MR

Obj104

12.If the consumption function is given by , determine the marginal propensity to consume and the marginal propensity to save when I =25.

13.If x = 25-3p-p2 be a demand function , find the point elasticity of demand at p=3

14.If the demand function for a product is given by p=4-5x2 , for what value of x does the demand have unit elasticity?

Obj105

15.The demand x ,as afunction if income I is given by .Determine the income elasticity of demand at I =200

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16. A TV company has 1000 subscribers who are each paying Rs.100 per month .The company proposes to increase the monthly subscription and it is believed that for every increase of Re.1 , five subscribers will discontinue the service. Find what increase will yield maximum revenue and what will this revenue be?

Obj106

17.A manufacturing cost of an item consists of Rs.1000 as overheads , material cost Rs2 per item and labour cost for x items produced .Find how many items be produced to have average cost as minimum.

Obj107

18.A company produces x units of output at a total cost of .Find a) The output at which marginal cost is minimum b) The output at which average cost is minimum c) The output at which average cost in equal to marginal cost.