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    Short Run Profit Maximizing

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    The manufacture of high-quality flatbed scanners is trying to decide what price to set forits product. The costs of production and the demand for the product are assumed to be as follows:D TC = 500,000 + 0.85Q + 0.015Q and MC = 0.85 + 0.03Q; Q =14,166 - 16.6P2a. Determine the short-run profit maximizing price.

    b. Show on a diagram the firm's AC, AVC, MC, P and MR.

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    Solution Preview

    If we assume that the firm is the monopolist in the market, it is a

    price setter. Then it will produce at ...

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