A firm faces the following average revenue (demand) curve:
P  120  0.02Q
where Q is weekly production and P is price, measured in cents per unit. The firm’s cost function is given by C  60Q  25,000. Assume that the firm maximizes profits.
a. What is the level of production, price, and total profit per week?
b. If the government decides to levy a tax of 14 cents per unit on this product, what will be the new level of production, price, and profit?