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Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firm - Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decises to charge the same price as Tile King to avoid the possibility of a price war. The price charged by Tile King is $20,000.

Ajax has the following short-run cost curve:
TC = 800,000 - 5000Q + 100Q^2

a) Compute the marginal cost curve for Ajax

b) Given Ajax's pricing strategy, what is the marginal revenue function for Ajax

c) Compute the profit-maximizing level of output for Ajax

d) Compute Ajax's total dollar profits

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M968281

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