**REVIEW QUESTIONS**

**Question 1**

- Suppose the demand function of a firm is given by Q + P – 20 = 0 and its total costs by TC -48 -4Q = 0.
- Find Profit as a function of output Q. (6)
- With the use of quadratic formula find the intercepts for profit. (6)
- Find the value of output that maximises Profit and the maximum Profit. (8)

**Question 2**

- Suppose the demand function of a firm is given by Q + P – 20 = 0 and its total costs by TC -48 -4Q = 0.
- Show with a diagram that Profit function reaches its maximum before TR. (12)
- Compare the break-even points with the x-intercepts of the Profit function. (8)

**Question 3**

- If fixed costs are 4, variable costs per unit are 3, and the demand function is:
- Find TC and TR as functions of output Q. (4)
- With the use of quadratic formula find the intercepts for TR. (5)
- Find the coordinates of the break-even point. (5)
- Comment on the values of Q less and greater than the first break-even point. (6)

**Question 4**

- Given Total Revenue (TR) and Total Cost (TC), : and .
- The minister of public enterprises is due to appear in Parliament and comes to you as an economist to advise on when is Eskom likely to reach its first break-even point. (6)
- For the benefit of the minister also show where the Total revenue will be maximised and what is the maximum Total revenue?
**Hint**: Minister understands differentiation better than any method. (6) - Summarise your findings above in a clearly labelled diagram for Minister’s presentation in Parliament, use different shading methods to differentiate losses from profits. (8)

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**Question 5**

- If fixed costs are 4, variable costs per unit are 3, and the demand function is:
- Find The profit (as a function of output (Q). (5)
- Find and solve for q. (5)
- Prove that is a profit maximising condition. (6)
- Find the maximum profit. (4)

**Question 6**

- Given Total Revenue (TR) and Total Cost (TC), : and .
- Find The profit (as a function of output (Q). (5)
- Find and solve for q. (5)
- Prove that is a profit maximising condition. (6)
- Find the maximum profit. (4)

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