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Quick Tax, Inc.,is the only tax preparation firm in Daytona Beach. Total and marginal revenue relations for small business customers are:

TR = $280Q - $0.005Q2

MR = $280 - $0.01Q

Marginal costs are stable at $100 per unit. All other costs have been fully amortized.

As a monopoly, calculate Quick Tax's output, price, and profits at the profit-maximizing activity level.

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Solution Summary

This problem determines output, price, and profits.

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TR = $280Q - 0.005Q^2
MR = $280 - 0.01Q
MC = $100
TC = $100Q

Total Profit = TR - TC

= ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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