Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. You are given the following data for your firm, which sells a patented super-absorbent cleaning towel for use in large retail complexes (called One

1. You are given the following data for your firm, which sells a patented super-absorbent cleaning towel for use in large retail complexes (called "One Wring to Rule the Mall" ).

Q P TC
0 $90 $2,000
10 $88 $2,770
20 $86 $3,320
30 $84 $3,710
40 $82 $4,000
50 $80 $4,250
60 $78 $4,520
70 $76 $4,870
80 $74 $5,360
90 $72 $6,050
100 $70 $7,000

a. Determine equations for P=f(Q), MR=f(Q), ATC=f(Q, Q2), AVC=f(Q, Q2), MC=f(Q, Q2). Recall that your marginal equations should be derivatives of your totals!

b. Determine the profit-maximizing price and quantity. (Since MC is in terms of Q2, solving with calculus and algebra can be messy unless you know the quadratic formula. Your table should give an exact answer.)

c. How much total profit would your firm earn if you set P and Q according to part b?

d. Describe the competitiveness of the market by calculating the Lerner index.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Theory Of Moral Sentiments

Authors: Adam Smith, D D Raphael

1st Edition

0865970122, 9780865970120

More Books

Students also viewed these Economics questions

Question

Explain key aspects of e-learning

Answered: 1 week ago

Question

To what extent can OL ideas help this organization?

Answered: 1 week ago