4. You are the manager of a monopoly, and your demand and cost functions are given...

Question

Question

4. You are the manager of a monopoly, and your demand and cost functions are given by P-500- Q and C(Q)- 6,000+402, respectively. A. B. What price-quantity combination maximizes your firms profits? Calculate the maximum profits.

business economics

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

a) Given that demand function is P = 500 - Q and C = 6000 + 4Q^2

Profit = revenue - cost

= PQ - C

= (500 - Q)Q - 6000 - 4Q^2

= 500Q - 6000 - 5Q^2

Profits are maximized when marginal profits are zero

500 - 10Q = 0

Q = 50 units

P = 500 - 50 = $450

Hence profit maximizing price is $450 per unit and quantity is Q = 50 units

b) Profits are maximized at = 500x50 - 6000 - 5x(50^2) = $6500.

Add a comment

Answer 2

Similar Homework Help Questions

please type answers! do not print by hand! please answer all questions! You are the manager...

please type answers! do not print by hand! please answer all questions! You are the manager of a monopoly, and your demand and cost functions are given by P 200-2Q and C (Q) -2,000+30 , respectively. What price would maximizes your firm's profits? a. b. What quantity would maximizes your firm's profits? c. Calculate the maximum profits d. What price-quantity combination would maximizes revenue? e. Is demand elastic, inelastic, or unit elastic at the revenue maximizing price-quantity combination?
You are the manager of a monopolistically competitive firm, and your demand and cost func- tions...

You are the manager of a monopolistically competitive firm, and your demand and cost func- tions are given by Q = 18 - 3P C(Q) = 120 – 12Q + 3Q2 Find the inverse demand function. Determine the profit maximizing price and level of production. Calculate your firm's maximum profits.
A monopoly company has a cost function TC (Q) = Q and sells its product on...

A monopoly company has a cost function TC (Q) = Q and sells its product on the Italian and Greek markets. The Greek market has a demand function DE (P) = 6 − P for P ≤ 6 and 0 elsewhere, while the Italian market has a demand function DI (P) = 8 - P for P ≤ 8 and 0 elsewhere. (a) Calculate the single price that maximizes the firm's profits, quantity sold and profits. (b) If the company...

In a monopoly market, if the firm's market demand function is reflected at P = 11,100...

In a monopoly market, if the firm's market demand function is reflected at P = 11,100 - 30 Q, while the company's total cost function is TC = 400.000 + 300Q – 30 Q2+ Q3 Determine: a. the output level and selling price per unit that maximizes the company’s profit? b. maximum total profit? c. quantity at the socially optimum price (P = MC)? d. quantity at the fair return price (P = ATC)?
You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's...

You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 400 - 100, and your cost function is C(Q) = 80Q. What will be the profit with a two-part pricing strategy? Select one: a. $5,120 b. $6.482 c. $4,240 d. $4.980 arrant answer is: $5,120
-answer all of the questions. - type answers on a computer. Do not print by hand! You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product...

-answer all of the questions. - type answers on a computer. Do not print by hand! You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P 250-40 Q, and your cost function is C (Q) 10 O. Determine the optimal two-part pricing strategy. a. b. How much additional profit do you earn using a two-part pricing strategy compared with charging this consumer a per unit profit maximizing price? You are the...

You are the manager of a monopolistically competitive firm. The inverse demand for your product is...

You are the manager of a monopolistically competitive firm. The inverse demand for your product is given by P = 200 - 10Q and your marginal cost is MC = 5 + Q. a. What is the profit-maximizing level of output? b. What is the profit-maximizing price? c. What are the maximum profits?
Exercise 6. Consider a firm with monopoly power that faces the demand curve P= 100 – 3Q +4A 1/2 and has the total cost...

Exercise 6. Consider a firm with monopoly power that faces the demand curve P= 100 – 3Q +4A 1/2 and has the total cost function C = 4Q+ 10Q + A where A is the level of advertising expenditures, and P and Q are price and output a. Find the values of A, Q and P that maximizes the firm's profit. b. Find the maximum level of profit.
For a monopoly, the demand and cost functions are: Demand: Q = 100 - 0.20P Cost:...

For a monopoly, the demand and cost functions are: Demand: Q = 100 - 0.20P Cost: TC = 10 + 60Q Solve for the profit-maximizing quantity (Q).

You are the manager of a monopoly that faces an inverse demand curve P = 100...

You are the manager of a monopoly that faces an inverse demand curve P = 100 - 10Q and has constant average and marginal costs of $20 per unit. The government is considering legislation that would regulate your firm's price at $20 per unit. (a) What is the profit-maximizing quantity at the regulated price? Please show your calculations. (b) What is the profit (or loss) at the regulated price or quantity? Please show your calculations. (c) Can this firm continue...

4. You are the manager of a monopoly, and your demand and cost functions are given...

Homework Answers

Add Answer to:
4. You are the manager of a monopoly, and your demand and cost functions are given...

Post as a guest

Earn Coins

please type answers! do not print by hand! please answer all questions! You are the manager...

You are the manager of a monopolistically competitive firm, and your demand and cost func- tions...

A monopoly company has a cost function TC (Q) = Q and sells its product on...

In a monopoly market, if the firm's market demand function is reflected at P = 11,100...

You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's...

-answer all of the questions. - type answers on a computer. Do not print by hand! You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product...

You are the manager of a monopolistically competitive firm. The inverse demand for your product is...

Exercise 6. Consider a firm with monopoly power that faces the demand curve P= 100 – 3Q +4A 1/2 and has the total cost...

For a monopoly, the demand and cost functions are: Demand: Q = 100 - 0.20P Cost:...

You are the manager of a monopoly that faces an inverse demand curve P = 100...

4. You are the manager of a monopoly, and your demand and cost functions are given...

Homework Answers

Add Answer to: 4. You are the manager of a monopoly, and your demand and cost functions are given...

Post as a guest

Earn Coins

Add Answer to:
4. You are the manager of a monopoly, and your demand and cost functions are given...