Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Macroeconomics Expert

Problem:

Robert’s New Way Vacuum Cleaner Company is a recently commenced small business which produces vacuum cleaners and belongs to the monopolistically competitive market. Its demand curve for the product is expressed as Q = 5000 – 25P where Q is the number of the vacuum cleaners per year and P is in dollars. Cost estimation procedures have determined that the firm’s cost function is represented by TC = 1500 + 20Q + 0.02Q2.
Demonstrate all of your computations and processes. Illustrate your answer for each problem in complete sentences, whenever it is essential.

Required

1. What are the profit-maximizing output levels and price? Illustrate them and evaluate algebraically for equilibrium P (price) and Q (output). Then, plot the MC (marginal cost), D (demand), and MR (marginal revenue) curves graphically and demonstrate the equilibrium point.

2. How much economic profit do you anticipate that Robert’s company will make in the first year?

3. Do you anticipate this economic profit level to continue in following years? Why or why not?

Macroeconomics, Economics

  • Category:- Macroeconomics
  • Reference No.:- M914087

Have any Question? 


Related Questions in Macroeconomics

Choose one of the following two questions to discuss if

Choose one of the following two questions to discuss. If there are two original posts related to one question, then you have to choose the other question for your original post. 1. The world's Least Developed Country can ...

Jesus told us not to worry about tomorrow because we are to

Jesus told us not to worry about tomorrow because we are to focus on today and we are not promised tomorrow. (Mt. 6:34) Does this mean we should spend as much as we want and not save any for the future? Explain.

Let the exchange rate be defined as the number of dollars

Let the exchange rate be defined as the number of dollars per Japanese yen. Assume that there is a decrease in U.S. interest rates relative to that of Japan. (Part A) Would this event cause the demand for the dollar to i ...

Jamal now age 54 lost his job as a ship builder in 1995 his

Jamal (now age 54) lost his job as a ship builder in 1995. His plant never reopened, and he has very specialized skills that are no longer in demand. Jamal's unemployment is best classified as: a. cyclical b. structural ...

The basic primitive keynesian macro-economic model focuses

The basic (primitive) Keynesian macro-economic model focuses solely upon the determination of equilibrium in the real sector (goods market). This is made possible by the assumption that the interest rate (RD) is constant ...

What are the three types of mergers that firms can do

What are the three types of mergers that firms can do? Classify the following possible mergers between Starbucks and coffee growers, Bank of America and Fleet Bank, Microsoft and Steel company, Home Depot and Lowe's, int ...

Say that in year 1 both k and l have values of 1 while in

Say that in year 1 both K and L have values of 1 while in year 10 K has a value of 1.35 and L has a value of 1.1. What is the annual rate of change for k (note the lower case)?

Analyze the macroeconomic factors that led to the 2007-2009

Analyze the macroeconomic factors that led to the 2007-2009 recession. How were GDP, inflation, and unemployment affected during the recession, and how does the model show this? What monetary policies and fiscal policies ...

Explain why 76 years ago the rowell-sirois commission

Explain why, 76 years ago, the Rowell-Sirois Commission argued that: "The quality of education and welfare services is no longer a matter of purely provincial and local concern. In Canada today, freedom of movement and e ...

The bible prohibits usury lev 25 it is one reason the

The Bible prohibits usury (Lev. 25). It is one reason the Catholic Church forbid banking to Christians for 1,000 years. However debt and the paying of interest is very common now. Is borrowing Biblically forbidden? What ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen