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q = 6009 -25p where q is the number of plte covers per year and p is in dollars. Cost estimation processes have determined that the firm's cost function is represented by tc = 120 + 2500q -0.23 * q2. What is the profit maximizing price and output level. Solve this for equilibrium p and q. Also plot the mc,, d and mr curves. What profit do you expect the firm will make in the first year. Will the profit level continue in subsequent years?

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Related questions

Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for the product is expressed as Q = 5000 - 25P where Q is the number of vacuum cleaners per year and P is in dollars. Cost estimation processes have determined that the firm's cost function is represented by TC = 1500 + 20Q + 0.02Q2.

Show all of your calculations and processes. Describe your answer for each question in complete sentences, whenever it is necessary.

a. What are the profit-maximizing price and output levels? Explain them and calculate algebraically for equilibrium P (price) and Q (output). Then, plot the MC (marginal cost), D (demand), and MR (marginal revenue) curves graphically and illustrate the equilibrium point.

b. How much economic profit do you expect that Robert's company will make in the first year?

c. Do you expect this economic profit level to continue in subsequent years? Why or why not?

Harry Smith owns a metal-producing company that is an unregulated monopoly. After considerable experimentation and research, total cost and marginal cost curves are: TC = 100 + 60Q + Q2 MC = 60 + 2Q where MC is marginal cost (in dollars) and Q is output. The demand and marginal revenue curves for the product are P = 100 Q MR = 100 2Q where P is the product price (in dollars) and Q is output.

a. If Smith wants to maximize profit, what output should he choose?

b. What price should he charge and what are his profits?

NUMBER 3.

You have the follwoing information for a firm:

TR = 200 Q รขย€ย“ Q2 MR = 200 รขย€ย“ 2 Q

TC = 1000 - 8 Q + Q2 MC = - 8 + 2 Q

a. If the firm produces 60 units of output, what are profits or losses for this firm.

b. Is the firm maximizing profits producing Q = 60? If not, what is the profit maximizing

level of output produced?

c. What are maximum profits?

NUMBER 4.

A firm is currently producing 80 units of output. At this level of output produced, P = 150 and ATC = 120. Also asume that MC = 130 and MR is constant at all output levels and equal to 150.

a. Is this firm making profits? If so, what are these profits?

b. Is this firm maximizing profits? If not, what would you recommend this firm do to

maximize profits? Why?

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