You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 48 − 2P and C(Q) = 6 + 3Q + Q2. a. Find the inverse demand function for your firm’s product. P = − Q b. Determine the profit-maximizing price and level of production. Instructions: Round your response to the nearest penny (two decimal places). Price: $ Instructions: Round your response to one decimal place. Quantity: c. Calculate your firm’s maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ d. What long-run adjustments should you expect? Explain. multiple choice Entry will occur until profits are zero. Exit will occur until profits rise sufficiently high. Neither entry nor exit will occur.
You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 48 − 2P and C(Q) = 6 + 3Q + Q2. a. Find the inverse demand function for your firm’s product. P = − Q b. Determine the profit-maximizing price and level of production. Instructions: Round your response to the nearest penny (two decimal places). Price: $ Instructions: Round your response to one decimal place. Quantity: c. Calculate your firm’s maximum profits. Instructions: Round your response to the nearest penny (two decimal places). $ d. What long-run adjustments should you expect? Explain. multiple choice Entry will occur until profits are zero. Exit will occur until profits rise sufficiently high. Neither entry nor exit will occur.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
You are the manager of a
a. Find the inverse demand function for your firm’s product.
P = − Q
b. Determine the profit-maximizing
Instructions: Round your response to the nearest penny (two decimal places).
Price: $
Instructions: Round your response to one decimal place.
Quantity:
c. Calculate your firm’s maximum profits.
Instructions: Round your response to the nearest penny (two decimal places).
$
d. What long-run adjustments should you expect? Explain.
multiple choice
-
Entry will occur until profits are zero.
-
Exit will occur until profits rise sufficiently high.
-
Neither entry nor exit will occur.
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