Suppose you are the manager of Mountain Enterprises, a firm that holds a patent that makes...
Suppose you are the manager of Mountain Enterprises, a firm that
holds a patent that makes it the exclusive manufacturer of bubble
memory chips. Based on the estimates provided by a consultant, you
know that the relevant demand and cost functions for bubble memory
chips are
Q = 25 - 0.5P;
C = 50 + 5Q.
a. What is the firm's inverse demand function?
b. What is the firm's marginal revenue when producing four units of
output?
c. What are the levels of output and price when you are maximizing
profits?
d. What will be the level of your profits?
Please show work. Thanks!
Homework Answers
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