A pharmaceutical company has a monopoly on a new medicine. Under pressure by regulators and consumers, the company is considering lowering the price of the medicine by 10 percent. The company has hired you to analyze the effect of such a cut on its profits. How would you carry out the analysis? What information would you need? Firm S is the only producer of a particular type of foam fire retardant and insulation used in the construction of commercial buildings. The inverse demand equation for the product is P-1,500-.1Q where Qis the annual sales quantity in tons and P is the price per ton. The firm's total cost function (in dollars) is C-1,400,000 + 300Q + .05Q

a. To maximize profit, how much foam insulation should firm S plan to produce and sell? What price should it charge?

b. Compute the firm's total profit.