What is the profit-maximizing price and output level? , Ask an Expert

Economics

1. A small business which produces plastic vacuum-suction covers for round household dishes has a monopoly that is protected by a utility patent. The market demand curve for this product is estimated to be: Q = 6009 %u2013 25P where Q is the number of plate covers per year and P is in dollars. Cost estimation processes have determined that the firm%u2019s cost function is represented by TC = 120 + 2500Q -0.25*Q2.

(i) What is the profit-maximizing price and output level? Solve this algebraically for equilibrium P and Q and also plot the MC, D and MR curves and illustrate the equilibrium point.

(ii) What profit do you expect that the firm will make in the first year?

(iii) Do you expect this profit level to continue in subsequent years? Why or why not?

View complete question

Business Economics, Economics

Category:- Business Economics
Reference No.:- M9449436

Have any Question?Write your Review or question?

Related Questions in Business Economics

When comparing monopolization to monopolistic competition

When comparing monopolization to monopolistic competition in the wireless telecommunications world, what are some good differences to touch on in a short paper?

Some statistics students were interested in finding out in

Some Statistics students were interested in finding out in there was a relationship between the number of hours of study for a chapter and the score on that test. On the basis of the number of hours their classmates stud ...

A data set amount in dollars spent on books for a semester

a. Data set: Amount (in dollars) spent on books for a semester. Number of classes: 6 91 472 279 249 530 376 188 341 266 199 142 273 189 130 489 266 248 101 375 486 190 398 188 269 43 30 127 354 84 b. Number of classes: 5 ...

Practical exercise 1assume the demand for teachers ld in a

Practical Exercise 1: Assume the demand for teachers (Ld) in a school is given by the following equation: W = 1700 - 2L D and the supply of teachers (L S ) depends on whether the school is a public school or private sch ...

How technology government regulations international

How technology, government regulations, international factors, expectations about the future, and the macroeconomy play a role in managerial decision-making? Carefully explain each by giving example.

The food marketing institute shows that 16 of households

The Food Marketing Institute shows that 16% of households spend more than $100 per week on groceries. Assume the population proportion is p = 0.16 and a sample of 600 households will be selected from the population. Us ...

Two manufacturing firms are located on the banks of the

Two manufacturing firms are located on the banks of the Crimea River. Riditna Paper withdraws river water for use in its paper mill, and returns it, along with waste effluent, back into the river. (Effluent is a co-produ ...

Carefully explain how the price elasticity of demand affect

Carefully explain how the price elasticity of demand affect the revenue or profit of an organization?

The attractiveness of a country as a market or investment

The attractiveness of a country as a market or investment site depends on balancing the likely long-term benefits of doing business there, against the likely costs and risks. What do you consider are the determinants of ...

What is the types of cost fixed variable and marginal in

What is the types of cost: fixed, variable, and marginal in economics, and methods that market power alters the relationship between a firm's costs and the price at which it sells its product?

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

Recent Questions

Ask Business Economics Expert