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  3. 1 fred leased a large parcel of land at the...

Question: 1 fred leased a large parcel of land at the...

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1. Fred leased a large parcel of land at the Klondike River in Alaska to mine gold. He hired several workers and rented heavy equipment, including two excavators and an old gold wash plant. Freds monthly cost of mining gold includes his lease payments, wages, equipment maintenance, his opportunity cost of time etc., and is given b;y C(q) - 28,000 200q + 4q2 where q is the quantity of gold, measured in ounce. Note: For your calculations, carry 2 non-zero digits to the right of the decimal point. a) If the market price of one ounce of gold is $1,200, how much gold should Fred mine to maximize his profits? (3 points) b) Given the gold price of $1,200, what is Freds (short run) economic profit per month? (2 points) c) What is the minimum price for Fred so that it is optimal for him in the short run to mine gold? (5 points) d) What is the minimum required price in the long run so that it is optimal for Fred to mine gold? (5 points)

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