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Revenue and Profit Maximization Under Oligopoly

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I hope you ll can help I just don't understand this.

I have attached the problems.

Revenue and Profit Maximization Under Oligopoly
An oligopolist, the Bramwell Corporation has estimated its demand function and total cost functions to be as follows:

Q = 25 - 0.05P

TC = 700 + 200Q

Answer the following questions either by developing demand and cost schedules, using quantities from 1 to 14, but preferably by algebraically solving the equations.

What will be the price and quantity if Bramwell wants to

1) Maximize profit?

2) Maximize revenue?

3) Determine the maximum revenue and the maximum profit for the oligopolist

NB: You can use excel to do the schedule, but as a supplement (attached alongside your response), this exercise needs be calculated out here algebraically here in addition to a spreadsheet calculation. You can also use the "insert table" feature within this window.

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First, we know that a firms revenue is profit = revenue - cost

revenue = quantity X price.

Q = 25 - 0.05P, which means P = 500 - 20Q

profit = quantity X price - cost ...

Solution Summary

Revenue and Profit Maximization Under Oligopoly

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See Also This Related BrainMass Solution

Pricing and Output Decisions in an Oligopoly

Assume you are the manager of Yabba Cable Company, which provides commercial communication services to the town of Canyon Lake, Texas. Because of licensing restrictions in the market, only your company and two others (Dabba and Zabba) are allowed to operate in this market. The three companies decide to form a cartel and divide the market shares such that each company will provide services that will maximize its profits. The licensing restrictions allow each company to sell as much as it wants at a price ceiling of $2,400. You have the following output and MC data for each company:

Output MC ($)
Q Yabba Dabba Zabba
1,200 2,700 2,800 2,900
2,200 2,600 2,500 2,700
3,200 2,400 2,300 2,500
4,200 2,200 2,200 2,300
5,200 2,300 2,400 2,400
6,200 2,400 2,700 2,500

1. Calculate the industry output and market share at the current price of $2,400, assuming the prices are stable and unlikely to change.

2. Assume the current prices in the market are challenged by the regulatory agency, resulting in a new maximum price of $2,200. How will this change the industry output and market share for each company?

3. Is there any incentive for any company to cheat under either of the conditions in tasks a and b? Why or why not?

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