A firm with market power faces the following estimated demand , marginal cost ...
✅ The verified answer to this question is available below. Our community-reviewed solutions help you understand the material better.
A firm with market power faces the following estimated demand, marginal cost and total cost functions:
Qd = 94 000 – 500P + 0.4M – 4000PR
MC = 38 + 0.001Q
TC = 3 000 + 21Q
where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good.
The firm expects income to be $50 000 and PR to be $10.
The Inverse Demand Function is P = – Q
The Marginal Revenue Function is MR = – Q
The profit-maximizing choice of output is units.
The profit-maximizing price is $ .
The firm's profit is $ .
Please answer all parts of the question.Want instant access to all verified answers on moodle.uleth.ca?
Get Unlimited Answers To Exam Questions - Install Crowdly Extension Now!