A firm in a monopolisticallycompetitive market faces the followingdemand curve:Q(P) = 14,202 - 526PIts total cost function is:C(Q) = $2675 + 21QCalculate the profit maximizingquantity

Monopolistic competition is a market structure characterized by many firms selling products that are…

Answered: Calculate the profit maximizing…

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Economics

Calculate the profit maximizing quantity

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

ChapterB: Differential Calculus Techniques In Management

Section: Chapter Questions

Problem 3E

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

100%

A firm in a monopolistically
competitive market faces the following
demand curve:
Q(P) = 14,202 - 526P
Its total cost function is:
C(Q) = $2675 + 21Q
Calculate the profit maximizing
quantity

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Step 1: Understand Monopolistic Competition and Profit Maximization

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Step 2: Convert the Demand Function to Price Function

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Step 3: Calculate Total Revenue and Marginal Revenue

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Step 4: Determine Marginal Cost

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Step 5: Equate Marginal Revenue and Marginal Cost to Find Profit-Maximizing Quantity

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