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Chris M.
Chris M., M.S.W. Social Work
Category: Homework
Satisfied Customers: 2782
Experience:  Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)
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What amount would I have if MR 1000-10P for a Marginal increase

Resolved Question:

Appalachian Coal Mining believes that it can increase labor productivity and, therefore, net revenue by reducing air pollution in its mines. It estimates that the marginal cost function for reducing pollution by installing additional capital equipment is MC = 40P

where P represents a reduction of one unit of pollution in the mines. It also feels that for every unit of pollution reduction the marginal increase in revenue (MR) is MR = 1000-10P.

How much pollution reduction should Appalachian Coal Mining undertake?

Submitted: 6 years ago.
Category: Homework
Expert:  Chris M. replied 6 years ago.

Hello jhickle,

 

Marginal cost = MC = 40P

Marginal revenue = 1000 -10P

 

For optimal value we should have MC=MR

 

40P = 1000 -10P

50P = 1000

P = 1000/20

P = 50

 

Hope this helps!



Edited by Chris M. on 1/28/2010 at 2:25 AM EST
Customer: replied 6 years ago.
I actually edited the question so could you take a look at that and confirm the correct answer. Sorry...this is the first time I'm using this so I realized after I entered my initial post that I should have put the entire question. I upped the price to $20. Thanks.
Expert:  Chris M. replied 6 years ago.
THIS ANSWER IS LOCKED!

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