Asked by Mariam Jaser on May 27, 2024

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Suppose that Dent Carr's long-run total cost of repairing s cars per week is c(s)  3s2  75.If the price he receives for repairing a car is $36, then in the long run, how many cars will he fix per week if he maximize profits?

A) 0
B) 12
C) 9
D) 6
E) 18

Total Cost

The entire cost of production for a business, including both fixed (unchanging with output) and variable (changing with output) expenses.

Long-Run

A period in economics during which all factors of production and costs are variable, allowing all inputs to be adjusted to change the level of output.

Maximize Profits

The strategy or process aimed at making the highest possible profit from business operations.

  • Grasp the interplay between costs, prices, and supply over the long run in economic models.
  • Compute the best amount of items to manufacture or fix to ensure maximum profit over time, according to specific cost and revenue figures.
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Verified Answer

MG
Mathieu GrindlayJun 02, 2024
Final Answer :
D
Explanation :
To maximize profits, Dent Carr will choose the quantity of cars to repair (s) where marginal cost (MC) equals marginal revenue (MR). Given the price per car repair is $36, MR is $36. The long-run total cost function is given as c(s)=3s2+75c(s) = 3s^2 + 75c(s)=3s2+75 . To find MC, we differentiate c(s) with respect to s, which gives MC=6sMC = 6sMC=6s . Setting MC equal to MR, we have 6s=366s = 366s=36 , solving for s gives s=6s = 6s=6 . Therefore, to maximize profits, Dent Carr will fix 6 cars per week.