Question 4 The following information on demand, revenue and costs of a car maker: Demand: P = 1000 – 5Q Total Revenue: TR = 1000Q – 5Q2 Marginal Revenue: MR = 1000 – 10Q Marginal Cost: MC = 200 + 10Q where Q is the number of copies sold and P is the price. a) Find the price/quantity combination that maximises the firm's profit. b) Find the price/quantity combination that would maximise total revenue. What is the maximum total revenue? c) Draw demand, marginal revenue, and marginal cost curves on a graph.

Question 4 The following information on demand, revenue and costs of a car maker: Demand: P = 1000 – 5Q Total Revenue: TR = 1000Q – 5Q2 Marginal Revenue: MR = 1000 – 10Q Marginal Cost: MC = 200 + 10Q where Q is the number of copies sold and P is the price. a) Find the price/quantity combination that maximises the firm's profit. b) Find the price/quantity combination that would maximise total revenue. What is the maximum total revenue? c) Draw demand, marginal revenue, and marginal cost curves on a graph.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section: Chapter Questions

Problem 10PA

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