HomeworkLib
Question

A company produces patented fasteners by the thousands. Its demand function is QD = 8000 -...

A company produces patented fasteners by the thousands. Its demand function is QD = 8000 - (1000/3) P, and its total cost is TC = 3,000 + 10Q + 0.004Q2 , the marginal cost MC = 10 + 0.008Q. Where Q is output in thousands produced and sold and P is the price per thousand fasteners.

a. Find the inverse demand and marginal revenue functions.

b. Determine the profit-maximizing level of output.

c. What price will the company charge?

d. Determine total revenue, total cost, profit per unit and total profit for the profit maximizing level of output.

e. Compute marginal cost and price elasticity of demand at the profit-maximizing output and price. What general principle about a monopolist’s pricing do your numbers verify?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

0 0
Add a comment
Know the answer?
Add Answer to:
A company produces patented fasteners by the thousands. Its demand function is QD = 8000 -...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • A monopolist’s inverse demand is P=500-2Q, the total cost function is TC=50Q2 + 1000Q and Marginal...

    A monopolist’s inverse demand is P=500-2Q, the total cost function is TC=50Q2 + 1000Q and Marginal cost is MC=100Q+100, where Q is thousands of units. a). what price would the monopolist charge to maximize profits and how many units will the monopolist sell? (hint, recall that the slope of the MARGINAL Revenue is twice as steep as the inverse demand curve. b). at the profit-maximizing price, how much profit would the monopolist earn? c). find consumer surplus and Producer surplus...

  • 1. A monopolist’s inverse demand function is P = 150 – 3Q. The company produces output...

    1. A monopolist’s inverse demand function is P = 150 – 3Q. The company produces output at two facilities. The marginal cost of producing at facility 1 is: MC1= 6Q1 The marginal cost of producing at facility 2 is: MC2= 2Q2 Calculate the profit-maximizing level of output for each facility, and calculate the firm’s profit-maximizing price. Show your work.

  • Suppose that a price setting firm has the following direct demand function: Qd = 100-20P a....

    Suppose that a price setting firm has the following direct demand function: Qd = 100-20P a. Find the inverse demand curve. What is it’s slope and it’s intercept. b. Find the equation for Total Revenue where TR is a function of Q. c. Find the equation for Marginal Revenue, where MR is a function of Q. d. What is the quantity where Total Revenue is maximized? How is this related to Marginal Revenue? e. Calculate the own price elasticity of...

  • You are the manager of a monopolistically competitive firm. The inverse demand for your product is...

    You are the manager of a monopolistically competitive firm. The inverse demand for your product is given by P = 200 - 10Q and your marginal cost is MC = 5 + Q. a. What is the profit-maximizing level of output? b. What is the profit-maximizing price? c. What are the maximum profits?

  • A monopolist faces inverse market demand of P = 140- TC(Q) = 20° + 10Q +...

    A monopolist faces inverse market demand of P = 140- TC(Q) = 20° + 10Q + 200. and has Total Cost given by (20 points) Find this monopolist's profit maximizing output level. Find this monopolist's profit maximizing price How much profit is this monopolist earning?

  • The inverse demand function for good X is P = 5−0.05Q. The firm’s cost curve is...

    The inverse demand function for good X is P = 5−0.05Q. The firm’s cost curve is TC(Q) = 10+Q (1.7) (2 points) What is the value of total surplus? Suppose that there a monopolist firm in this industry who employs single-pricing strategy. (1.8) (2 points) What is the firm’s marginal revenue curve? (1.9) (2 points) What is the profit maximizing level of output?

  • Show work please A monopolist's inverse demand function is P= 150 – 3Q. The company produces...

    Show work please A monopolist's inverse demand function is P= 150 – 3Q. The company produces output at two facilities; the marginal cost of producing at facility 1 is MC1(Q1) = 6Q1, and the marginal cost of producing at facility 2 is MC2(Q2) = 2Q2: a. Provide the equation for the monopolist's marginal revenue function. (Hint: Recall that Q1 + Q2 = Q.) MR(Q) = 150-C6 Q4-06 Q2 b. Determine the profit-maximizing level of output for each facility. Output for...

  • A: A monopolist faces the following demand curve, marginal revenue curve, total cost curve for its...

    A: A monopolist faces the following demand curve, marginal revenue curve, total cost curve for its product: Q=3500-5p MR= 250-Q TC=15Q MC=100 What level of output maximizes total revenue? What is the profit-maximizing level of output? What is the profit-maximizing price? How much profit does the monopolist earn? Suppose that a tax of $10 for each unit produced is imposed by the state government. What is the profit-maximizing level of output?

  • A monopolist faces the following demand curve, marginal revenue curve, total cost curve for its product

    Scenario A: A monopolist faces the following demand curve, marginal revenue curve, total cost curve for its product: Q=3500-5p MR= 250-Q TC=150 MC=100 What level of output maximizes total revenue? What is the profit maximizing level of output? What is profit maximizing price? How much profit does the monopolist earn? Suppose that a tax of $10 for each unit produced is imposed by state government. What is the profit maximizing level of output

  • Questions 7 - 9 use the following information: A monopolist faces inverse market demand of P...

    Questions 7 - 9 use the following information: A monopolist faces inverse market demand of P = 230 – , and has Total Cost given by TC(Q) = 5Q2 + 10Q + 1000. 7. (20 points) Find this monopolist's profit maximizing output level. 8. Find this monopolist's profit maximizing price. 9. How much profit is this monopolist earning?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT