Answered: The demand and total cost functions for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The demand and total cost functions for a monopoly firm are:
Q(P) = 39.5 – 0.5P
TC(Q) = 60 – Q + 0.5 Q2
a) Plot the demand, marginal revenue, marginal cost, and average total cost curves, including the intersections with the horizontal and vertical axes.
b) What are the profit maximising QM and PM for this firm?
c) What is the firm’s profit πM?
d) What are the firm's fixed and variable costs?
e) What would be the socially optimal Q* and P* (round to 1 decimal place if needed)?

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how about questions d and e?

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Was there a mistake when the tutor wrote P = 79 - 2Q? It is supposed to be P = 79 - 0.5Q

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