Question

Derran Review Ward View Sis - DEX Tell me what you want to File Name root Duscon Layout Rafet Mas Holy Exo 4 Suppose a fum's inverse domand curve is given by P - 120 - SQ and its consequen ce 420 +500 +02 A Find the fem's optimal quantity, price and profit (1) by ung the protest and marginal profit equshions and ch by setting M e to MC. Ako proidea graph of MR and MC D Suppose instead that the firm can sell any and all of its output all the time t o P. 120. Find the firm's optimal output Photo ocuments X Deals - Groceries paw yahoo.com * O type here to search

Can you solve this for me I am having hard doing it

Answer 1

glu P= 120 - 0:59 TCFC = 420 & Go Q & Q" "117 C 5 – 0 12 TR= Px = 120 -0.5Q)Q TR . (20Q - 0 5 Q MR: d (TR). 120 - Q. = TC = 420 +60Q +Q2. Mes afte) 60 +2Q. - M - ☺ Now, PROFST, T = = T. TR-TC 120 Q-0-5QP- 420-60 Q-02 60 Q - 1.5Q? - 420 DIFFERENTIATING W. r.t. Q we getr olem - 60 - 30 60- 3Q 20 c) 3Q = 60 tot i Q = 201 So, to 60 (20) – 1.5 (20)2-420 a = 1200 - 105 X 400 - 420 a = 1200 - 600 – 420

THUS, * = 1801 So, p = 120 - 0.5 x 20 - 120 - 10 I put = 1101 110 BY EQUA Tang "Fan Oena PoE E Qurlibrsom LEVEL - MR=mc so :- - Equating ② and we get: - 120- Q - 60+ 20 + 3Q = 60 Q - 20 = 19*5201 pa 120- 0:58 20 p = 120- 10 1p* - 1101 .

200 -150 100 200 250 300 350 ae
Where, the red line shows MR function and blue line shows MC function.

B.

If we put the price in the equation of inverse demand than we can see that no output is demanded at that price. So, optimal quantity will be zero in this case.

. (6) When P= 120, Quantity will be on Pa 120- 0.50 9 120 - 120-0-5Q 9 0.5Q - 0 * )Q*=o) So, when the price is 120 than firm can sell zero quantity of goods,