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Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one very large firm-Tile King. Ajax produces a multi-headed tunnel wall scrubber that is very similar to a model produced by Tile King. Ajax has decided 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 - 5,000 Q + 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.:- M961109

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