Henry Potter owns the only well in town that produces clean drinking water. He faces the...

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Henry Potter owns the only well in town that produces clean drinking water. He faces the...

Henry Potter owns the only well in town that produces clean drinking water. He faces the following demand, marginal-revenue, and marginal-cost curves:

Demand: P = 70 - Q

Marginal revenue: MR = 70 - 2Q

Marginal cost: MC = 10 +Q

a. Graph these three curves. Assuming that Mr. Potter maximizes profit. What quantity does he produce? What price does he charge? Show these results in your graph.

business economics

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Answer 1

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Di- P-To-Q MR=70-20 Mc = lotQ P ro МО MR, ME MR 1o Demend 20 35 A Bofit is meximized at MR=MC 7o-20=10tQ fu= 32 Q=120 P-To-Q

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Henry Potter owns the only well in town that produces clean drinking water. He faces the...

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