Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
9th Edition
ISBN: 9781259290619
Author: Michael Baye, Jeff Prince
Publisher: McGraw-Hill Education
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Question
Chapter 8, Problem 7CACQ
(A)
To determine
The inverse demand function of the firm is to be ascertained.
(B)
To determine
The profit maximizing level of output and price combination is to be explained.
(C)
To determine
The maximum profits is to be calculated.
(D)
To determine
Long run adjustments that should be expected is to be explained.
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You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 − 4P and C(Q) = 4 + 4Q + Q2a. Find the inverse demand function for your firm’s product. b. Determine the profit-maximizing price and level of production. c. Calculate your firm’s maximum profits. d. What long-run adjustments should you expect? Explain
You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 – 4P and C(Q) = 4 + 4Q + Q2.
a. Find the inverse demand function for your firm’s product.
b. Determine the profit-maximizing price and level of production.
c. Calculate your firm’s maximum profits.
d. What long-term adjustments should you expect? Explain.
You are the manager of a monopolistically competitive firm, and your demand and cost functions are estimated as Q = 36 − 4P and C(Q) = 4 + 4Q + Q2.
a. Find the inverse demand function for your firm’s product. P =____ −_____ Q
b. Determine the profit-maximizing price and level of production.
Instruction: Price should be rounded to the nearest penny (two decimal places).
Price: $_____
Quantity:_____
c. Calculate your firm’s maximum profits.
Instruction: Your response should appear to the nearest penny (two decimal places). $______
d. What long-run adjustments should you expect? Explain. multiple choice
A. Entry will occur until profits are zero.
B. Neither entry nor exit will occur.
C. Exit will occur until profits rise sufficiently high.
Chapter 8 Solutions
Managerial Economics & Business Strategy (Mcgraw-hill Series Economics)
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