Assume the following equations describe the conditions for a monopoly: Qd = 2,000 - 100P TC = 3,500 + 5q + .005q2 Where Qd is the quantity demanded, P is the commodity's price in dollars, TC is the firm's total cost in dollars and q is the quantity of output produced. Based upon these equations, answer the following questions: a. What is the firm's equation for total revenue expressed as a function of quantity? b. What is the firm's equation for marginal revenue expressed as a function of quantity? What is the firm's equation for marginal cost expressed as a function of quantity? c. What is the firm's profit maximizing quantity of output? d. What price will the firm charge for the commodity? e. What would be the socially optimal quantity of output? f. What price would regulators have to establish in order to have the firm produce the socially optimal quantity of output?
Assume the following equations describe the conditions for a monopoly:
Qd = 2,000 - 100P
TC = 3,500 + 5q + .005q2
Where Qd is the quantity demanded, P is the commodity's
a. What is the firm's equation for total revenue expressed as a function of quantity?
b. What is the firm's equation for marginal revenue expressed as a function of quantity? What is the firm's equation for marginal cost expressed as a function of quantity?
c. What is the firm's profit maximizing quantity of output?
d. What price will the firm charge for the commodity?
e. What would be the socially optimal quantity of output?
f. What price would regulators have to establish in order to have the firm produce the socially optimal quantity of output?
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