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4. Suppose a greenhouse vegetable farmer enjoys a substantial degree of market power in the industry due to the farm's customized output. He has estimated demand for his work to be:
[tex]\[Q = 480 - 0.2P\][/tex]
Where [tex]\(Q\)[/tex] is the number of outputs provided monthly and [tex]\(P\)[/tex] is the price. The average variable cost function is also estimated to be:
[tex]\[AVC = 2Q^2 - 15Q + 400\][/tex]
Where AVC is average variable cost (measured in cedis), and [tex]\(Q\)[/tex] is the number of outputs per month. The fixed costs each month are GHS 8,000.
a. What is the inverse demand function for the farmer's outputs? (2 Marks)
b. What is the marginal revenue function? (2 Marks)
c. If the farmer wishes to maximize his profit, how many outputs should he target each month? (3 Marks)
d. What price should he charge? (2 Marks)
e. Mention two objectives, and any two methods with their limitations, of demand forecasting. (3 Marks)
f. With the aid of a diagram, briefly describe the three stages of production. (3 Marks)
Sagot :
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