Re: MSQE 2008 MICRO

Posted by Amit Goyal on Apr 10, 2010; 4:53pm
URL: http://discussion-forum.276.s1.nabble.com/MSQE-2008-MICRO-tp4869640p4882645.html

Boat builders will maximize profits:
ith boat builder has cost function Ci(y)= 11 + iy, for y > 0, Ci(0) = 0 its clear that boat builder i ≥ 25 will not build any boat because the price at which they will sell is 25 and MC exceeds 25. For i < 25, if a boat builder will produce positive amount he will produce upto his full capacity i.e. 12.
Profit of the ith builder must be ≥ 0 i.e. 25(12) - 11 - 12i ≥ 0 which implies i < 24.08, This inturn implies that 24 builders, i from 1 to 24, will produce a positive amount of output. Since each of them produces 12, the total no. of boats built per year is 288.