A price-setting firm faces the following estimated demand, Ask an Expert

Economics

A price-setting firm faces the following estimated demand and average variable cost functions:

Q_d=800,000 - 2000P + 0.7M + 4000P_R

AVC = 500 - 0.03Q + 0.000001Q²

where Q_d is the quantity demanded, P is price, M is income, and P_R is the price of a related good. The firm expects income to be $40,000 and P_R to be $53. Total fixed cost is $2,6000,000. What is the estimated marginal revenue function for the firm?

a. MR = 800 - 0.002Q

b. MR = 800 - 0.004Q

c. MR = 1600 - 0.004Q

d. MR = 520 - 0.001Q

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91992563

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