Need help with managerial economics homework?
Need help with managerial economics homework?
The problem is:
The production manager of a clothing manufacturer estimates that the daily total cost of producing men's suits is given by the equation: C = 2,000 + 396 Q - 0.8Q². The market price of suits is $300. Should the firm shut down? Explain.
I'm not really sure if I started this right, but here is what I have so far:
TVC = 2,000 + 396 Q - 0.8Q²
AVC = 396 - 0.8Q
MC = 396 - 1.6Q
300 = 396 - 1.6Q
Q = 60
If someone could explain how you're suppose to solve this problem I would really appreciate it. Thanks.
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