A company operating in a market of monopolistic competition has an inverse demand curve for its product: P=315-3q, where q is the number of units produced of the good and P its price. The total cost of production of this company is given by: TC(q)=q²+75q+4000. a) To maximize profits, how many units of the good should you sell? b) What price should I charge? (c) What benefits would it reap? (d) Given the above information, how much would you have to reduce fixed costs for longterm equilibrium to occur? Represent graphically
A company operating in a market of monopolistic competition has an inverse demand curve for its product: P=315-3q, where q is the number of units produced of the good and P its price. The total cost of production of this company is given by: TC(q)=q²+75q+4000. a) To maximize profits, how many units of the good should you sell? b) What price should I charge? (c) What benefits would it reap? (d) Given the above information, how much would you have to reduce fixed costs for longterm equilibrium to occur? Represent graphically
Chapter26: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 10E
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Exercise A.4.
A company operating in a market of
a) To maximize profits, how many units of the good should you sell?
b) What price should I charge?
(c) What benefits would it reap?
(d) Given the above information, how much would you have to reduce fixed costs for longterm equilibrium to occur? Represent graphically
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ISBN:
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Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc