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
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
100%
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
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps with 10 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education