The market demand for a monopoly firm is estimated to be: Qd= 100,000 − 500P + 2M + 5,000PR where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2021. The average variable cost function is estimated to be AVC = 520 − 0.03Q + 0.000001Q2 Total fixed cost in 2021 is expected to be $4 million. The profit-maximizing price for 2021 is a. $260. b. $560. c. $520. d. $80. e. $100
The market demand for a monopoly firm is estimated to be: Qd= 100,000 − 500P + 2M + 5,000PR where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2021. The average variable cost function is estimated to be AVC = 520 − 0.03Q + 0.000001Q2 Total fixed cost in 2021 is expected to be $4 million. The profit-maximizing price for 2021 is a. $260. b. $560. c. $520. d. $80. e. $100
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter9: Applications Of Cost Theory
Section: Chapter Questions
Problem 3E
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The market demand for a
Qd= 100,000 − 500P + 2M + 5,000PR
where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has
AVC = 520 − 0.03Q + 0.000001Q2
Total fixed cost in 2021 is expected to be $4 million. The profit-maximizing price for 2021 is
a.
$260.
b.
$560.
c.
$520.
d.
$80.
e.
$100
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