Monopolist Question

timer Asked: Jun 1st, 2015

Question description

A company is a monopolist. 

The demand function for its product is as follows:

  Q = 60 – 0.4P + 6Y + 2A

Where Q = quantity sold in units

  P = Price per unit

  Y = per capita disposal income (thousands of dollars)

A = hundreds of dollars of advertising expenditures

The firm’s average variable cost function is

AVC = Q2 – 10Q + 60

  Y = 3 (thousand) and

  A = 3 (hundred) for the period being analyzed.

A. If fixed costs are equal to $1,000, derive the firm’s total cost function and marginal cost function.

C(q) = fixed costs + variable cost

B. Derive a total revenue function and marginal revenue function for the firm.

C. Calculate the profit maximizing level of output and price for the firm.

D. What will the profit be?

Tutor Answer

(Top Tutor) Studypool Tutor
School: New York University
Studypool has helped 1,244,100 students
flag Report DMCA
Similar Questions
Hot Questions
Related Tags

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors