I need help with part b 1. SOCIAL ENTREPRENEURSHIP: Your student organization wants to raise some money to donate to a favorite charity, soyou decide to put on a spring benefit show. Even though you are technically "not for profit" for tax purposes, you still want toraise as much money as you can for the cause, so you act like a profit-maximizing firm. Consider how you should act undervarious scenarios.Assume that the demand for tickets to your show is given by P[Q] = 40 – ½ Q and that your only costs are the 300 you mustpay to rent the theatre. Compute your profit-maximizing price (P*), quantity (Q*) and Profit (T*).b. Suppose instead that the demand curve is actually nonlinear and all costs disappear (covered by a mysterious and generousbenefactor). Specifically, P[Q] = 75 – Q², which implies that total revenue is TR[Q] = Q*P[Q] = Q(75 – Q') = 75Q – Q°,and then marginal revenue is MR[Q] = dTR/dQ = 75 – 3Q². Compute your profit-maximizing price (P*), quantity (Q*) andProfit (*). TIPS: If all costs are zero, then how is profit related to revenue? How could you find the highest point of a hill-shaped curve? For a picture of TR, try Googling graph 75x-x^3а.

"Since you asked for part b, I am answering part b." Profit maximization condition: MR =MC

b. Suppose instead that the demand curve is actually nonlinear and all costs disappear (covered by a mysterious and generous benefactor). Specifically, P[Q] =75 – Q², which implies that total revenue is TR[Q] = Q*P[Q] = Q(75 – Q²) = 75Q – Q³, and then marginal revenue is MR[Q] = dTR/dQ = 75 – 3Q². Compute your profit-maximizing price (P*), quantity (Q*) and Profit (*). TIPS: If all costs are zero, then how is profit related to revenue? How could you find the highest point of a hill- shaped curve? For a picture of TR, try Googling graph 75x-x^3

b. Suppose instead that the demand curve is actually nonlinear and all costs disappear (covered by a mysterious and generous benefactor). Specifically, P[Q] =75 – Q², which implies that total revenue is TR[Q] = QP[Q] = Q(75 – Q²) = 75Q – Q³, and then marginal revenue is MR[Q] = dTR/dQ = 75 – 3Q². Compute your profit-maximizing price (P), quantity (Q) and Profit (). TIPS: If all costs are zero, then how is profit related to revenue? How could you find the highest point of a hill- shaped curve? For a picture of TR, try Googling graph 75x-x^3

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter8: Perfect Competition

Section: Chapter Questions

Problem 4SCQ: Suppose that the market price increases to 6, as Table 8.14 shows. What would happen to the...

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