Equilibrium: Finding Profit Maximizing Output and Price
Not what you're looking for?
Given the following Demand & Supply functions:
Qd = 25 – P
Qs = 10 + 2P
a – What is the equilibrium values of P and Q?
Now suppose the demand function changes to:
Qd = 10,000 – 2P
If Total Cost function is:
TC = 5000 + 50Q
b - Find the Profit – maximizing Quantity and Price.
c – Find the firm’s profit.
Given the following Demand and Cost functions for a monopolistically competitive firm:
Qd = 100,000 - 20P
TC = 1,000 + 10Q + .05Q to the power of 2
a. Find the profit maximizing Quantity and Price.
b. Find the Profit.
Purchase this Solution
Solution Summary
There are two problems. Solutions to given problems explain the steps to find out equilibrium price and quantity. It also explains the steps to find out profit maximizing output and price.
Solution Preview
Solution is attached as word document also.
Soution 1.
a - What is the equilibrium values of P and Q?
For equilibrium
Qd=Qs
25-P=10+2P
3P=25-10=15
3P=15
P=15/3=5
Qd (at P=5) =25-5=20
Qs (at P=5) =10+2*5=10+10=20
Equilibrium Price =$5
Equilibrium Quantity=20
Now suppose the demand function changes to:
Qd = 10,000 - 2P
If Total Cost function is:
TC = 5000 + 50Q
b - Find the Profit - maximizing Quantity and ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
Recent Feedback
- "Thank you"
- "Really great step by step solution"
- "I had tried another service before Brain Mass and they pale in comparison. This was perfect."
- "Thanks Again! This is totally a great service!"
- "Thank you so much for your help!"
Purchase this Solution
Free BrainMass Quizzes
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.