Suppose a firm's inverse demand curve is given by P 120 - 50 and its cost equation

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Suppose a firm's inverse demand curve is given by P 120 - 50 and its cost equation is C 420 + 60Q + Q

a. Find the firm's optimal quantity, price, and profit (1) by using the profit and marginal profit equations and (2) by setting MR equal to MC. Also provide a graph of MR and MC.

b. Suppose instead that the firm can sell any and all of its output at the fixed market price P 120.

At any higher price, it will sell nothing. Find the firm's optimal output.

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Managerial Economics

ISBN: 9781119554912

5th Edition

Authors: William F. Samuelson, Stephen G. Marks

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Question Posted: Oct 08, 2024 08:01 AM

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Suppose a firm's inverse demand curve is given by P 120 - 50 and its cost equation

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Managerial Economics

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