Suppose Razor is the only pharmaceutical firm that sells a flu vaccinein an economy. It faces the following demand, marginal revenue,marginal cost and total cost functions.P = 70 – QMR = 70 – 2QMC = 10 + QDemand:Marginal revenue:Marginal cost:Total cost:TC = 20 + 10Q +2Find the profit maximizing output and the price of the vaccine for thefirm. Show your steps.а.b.Derive the average cost function. Show your workings.Use the result of part a and b, find the profit level of the firm. Showyour workings.с.d.Suppose the government is considering a price ceiling 10 percentbelow the price derived in part a.I.Suggest one reason for the imposition of the price ceiling.II. i)With the price ceiling, what is the price for the vaccine?ii)Given the price in part i, how many vaccines will bepurchased in the vaccine market?With the price ceiling, is there any shortage in thevaccine market? Explain your answer.iii)

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Dw your steps. ne average cost function. Show your workings. result of part a and b, find the profit level of the rkings. the government is considering a price ceiling 1 e price derived in part a. Euggest one reason for the imposition of the pric With the price ceiling, what is the price f Given the price in part i, how many vacc: purchased in the vaccine market? i) With the price ceiling, is there any shorta vaccine market? Explain your answer.

Dw your steps. ne average cost function. Show your workings. result of part a and b, find the profit level of the rkings. the government is considering a price ceiling 1 e price derived in part a. Euggest one reason for the imposition of the pric With the price ceiling, what is the price f Given the price in part i, how many vacc: purchased in the vaccine market? i) With the price ceiling, is there any shorta vaccine market? Explain your answer.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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