Suppose Neu Train is the only high-speed railway between City A and City B. She operates with a cost function of C = 2,000 + 5Q2 - 500Q. Furthermore, an estimate shows that the inverse market demand for the high- speed railway between the two cities is P = 14,500 – 70Q. Calculate the profit-maximizing output level and the price of Neu Train.
Suppose Neu Train is the only high-speed railway between City A and City B. She operates with a cost function of C = 2,000 + 5Q2 - 500Q. Furthermore, an estimate shows that the inverse market demand for the high- speed railway between the two cities is P = 14,500 – 70Q. Calculate the profit-maximizing output level and the price of Neu Train.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Suppose Neu Train is the only high-speed railway between City A and City B. She operates with a cost function of C = 2,000 + 5Q2 - 500Q.
Furthermore, an estimate shows that the inverse market demand for the high- speed railway between the two cities is P = 14,500 – 70Q.
Calculate the profit-maximizing output level and the price of Neu Train.
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