Question
A companymanufactures and sellsq unitsper week.If the weekly cost and demand functions are C(q)=5000+2q,0q10,000 (cost) p(q)=100.001q,0q10000 (demand) Suppose that the government has decided to tax
A companymanufactures and sellsq
unitsper week.If the weekly cost and demand functions are
C(q)=5000+2q,0q10,000
(cost)
p(q)=100.001q,0q10000
(demand)
Suppose that the government has decided to tax the company $2 for each unit produced.
(a) Taking into account this additional cost, how many unitsshould the company manufacture each week to maximize its weekly profit?
(b) What is the maximum weekly profit?
(c) How much should the company charge for the units to realize the maximum weekly profit?
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Econometric Analysis Of Cross Section And Panel Data
Authors: Jeffrey M Wooldridge, J M Wooldridge
2nd Edition
0262232588, 9780262232586
