Profit Maximizing Point
Not what you're looking for?
You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's total cost function is C=4Q^2 and marginal cost is MC=8Q. What is your profit-maximizing quantity (Q) and price (P), and what is your firm's economic profit? If you operate a typical firm in this market, what will happen in the long run in the market's Q, P and profits if there is no change in demand for the product? Describe a strategy that you can implement to increase your profits in the short-run?
2. You are managing a monopoly that faces a demand curve described by P=85-5Q. Total revenue is TR=85Q-5Q^2 (^=squared), and marginal revenue is MR=85-10Q. Your monopoly's total cost function is TC=20+5Q, and marginal cost is MC=5. What are your profit-maximizing quantity (Q) and price (P), and if any, your economic profits? In the short-run, how can you make more profits?
Purchase this Solution
Solution Summary
The profit-maximizing point is featured.
Solution Preview
1. You are the manager of a firm that sells its product in a competitive market at a price of $40. Your firm's total cost function is C=4Q^2 and marginal cost is MC=8Q. What is your profit-maximizing quantity (Q) and price (P), and what is your firm's economic profit? If you operate a typical firm in this market, what will happen in the long run in the market's Q, P and profits if there is no change in demand for the product? Describe a strategy that you can implement to increase your profits in the short-run?
C = 4Q^2 and MC=8Q
In the competitive market, the ...
Purchase this Solution
Free BrainMass Quizzes
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.