I need to know how to calculate demand and price for two different demand functions that have the same cost function.
P1 = 20 - .0125Q1
P2 = 40 - .025Q2
ATC = MC = 3.00.
How do I calculate the price and quantity for each? How does ATC/MC factor into the price/quantity estimate?
What is the economic profit for each?
Thanks© BrainMass Inc. brainmass.com December 24, 2021, 5:09 pm ad1c9bdddf
For the first demand, the firm's total revenue is
TR = Q1*P1 = (20 - .0125Q1)*Q1 = 20 Q1 - .0125Q1^2
Then the Marginal revenue is
MR1 = dTR / dQ1 = 20 - .025Q1
we know that ...
The economic profit for each is given. The different demand functions that have the same cost function is analyzed.