Question
2. A firm faces the demand curve, P = 80 - 3Q, and has the cost equation: C = 200 + 20Q, where P =
2. A firm faces the demand curve, P = 80 - 3Q, and has the cost equation: C = 200 + 20Q, where P = price, C = total cost, and Q = quantity.
(a) Find the optimal quantity and price for the firm.
(b) Now suppose that the demand for the firm's product changes to: P = 110 - 3Q. Find the new optimal quantity and price. Has there been an increase or a decrease in demand? Explain.
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Economics Today The Macro View
Authors: Roger LeRoy Miller
19th Edition
0134478762, 978-0134478760
