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    Price-Quantity Combination to Maximize Profit

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    You are the manager of a monopoly, and your demand and cost functions are given by
    P=200-2Q and C(Q)=2,000+3Q , respectively.

    a. What price-quantity combination maximizes your firm's profits?

    b. Calculate the maximum profits

    c. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price-quantity combination?

    d. What price-quantity combination maximizes revenue?

    e. Calculate the maximum revenues.

    f. Is demand elastic, inelastic, or unit elastic at the revenue-maximizing price-quantity combination?

    You are the manager of a firm that produces a product according to the cost function
    2 3
    C(qi ) = 100 +50qi - 4q i + qi . Determine the short-run supply function if:

    a. You operate a perfectly competitive business.
    b. You operate a monopoly.
    c. You operate a monopolistically competitive business.

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    Solution Summary

    This job emphasizes maximum revenues.