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Robert’s New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners...


Robert’s New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for the product is expressed as Q = 5000 – 25P where Q is the number of vacuum cleaners per year and P is in dollars. Cost estimation processes have determined that the firm’s cost function is represented by TC = 1500 + 20Q + 0.02Q2.

A) What are the profit-maximizing price and output levels? Explain them and calculate algebraically for equilibrium P (price) and Q (output). Then, plot the MC (marginal cost), D (demand), and MR (marginal revenue) curves graphically and illustrate the equilibrium point.

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Answer #1

5000-as 29p p 5000 冫200 a-25Q2. 2.5 E-y 2 S 200 finn has heen earning thu maunury profh undu Condiions and there Regardny production at the uilitm pùe aivel Ouuphot Run cost AR MR Ac AR uf MAPlease Kindly help with Thumbs up for this answer. If any doubts feel free to query. Thank you

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