A price searching firm faces the demand curve p = 20 - q and has marginal costs given by mc = 12?
A) Calculate the firms marginal revenue curve if the firm can only charge one price.
b) what is the optimal price and quantity the firm will charge in order to maximize profits?
c) if the firm's fixed costs are $16, what are the profits of the firm?
d) draw the demand curve, MR curve, MC curve, ATC cuve
Calculate and show on a graph the deadweight loss
e) now suppose the firm is able to charge an entry fee, as well as a price for every unit sold.
What is the optimal entry fee, the price per unit, and the deadwight loss
Calculate them and show these on the graph below.