1.4. A firm faces the following average revenue (demand) curve: P = 120 0.02Q where Q...

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1.4. 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?

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Microeconomics

ISBN: 9780132080231

7th Edition

Authors: Robert S. Pindyck, Daniel L. Rubinfeld

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Question Posted: Oct 26, 2024 04:01 AM

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1.4. A firm faces the following average revenue (demand) curve: P = 120 0.02Q where Q...

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Microeconomics

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