P2.10 Average Cost Minimization. Giant Screen TV, Inc., is a San Diego–based importer and dis-… 1 answer below »

/in /by

P2.10 Average Cost Minimization. Giant Screen TV, Inc., is a San Diego–based importer and dis- tributor of 60-inch screen, high-resolution televisions for individual and commercial customers. Revenue and cost relations are as follows:

 

TR  =  $1,800Q  –  $0.006Q2:

MR   =  DTR/DQ  =  $1,800  –  $0.012Q  TC = $12,100,000 + $800Q + $0.004Q2:

MC  =  DTC/DQ  =  $800  +  $0.008Q

 

A.   Calculate output, marginal cost, average cost, price, and profit at the average-cost mini- mizing activity level.

B.    Calculate these values at the profit-maximizing activity level.

C.    Compare and discuss your answers to parts A and B.