Dr Leona Williams a well know Plastic Surgeon, has a reputation for being one of the best surgeons for reconstructive nose surgery. Dr Williams enjoys a rather substantial degree of market power in this market. She has estimated demand for her work to be
Q= 480 - 0.2P
where Q is the number of nose operations performed monthly and P is the price of a nose operation.
what is the inverse demand function for Dr. William's service?
What is marginal revenue function?
The average variable cost function for reconstructive surgery is estimated to be:
AVC = 2Q - 15Q + 400
Where AVC is average variable cost (measured in dollars), and Q is the number of operations per month. The Doctor's fixed costs each month are $8,000.
If the Doctor wishes to maximize her profit, how many nose operations should she perform each month?
Illustrate what price should Dr Williams charge to perform a nose operation?
describe how much profit does she earn each month?