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A firm has developed a new product for which it has a registered trademark. The firm's market research department has estimated that the demand for

A firm has developed a new product for which it has a registered trademark. The firm's market research department has estimated that the demand for this product is Q(P,A)=11,600-1,000P+20A1^/2where Q is annual output, P is the price, and A the annual expenditure for advertising. The total cost of producing the new good is C(Q)=.001Q^2+4Q. The unit cost of advertising is constant at m=1.

What is consumer surplus if the firm adopts this strategy?

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1,500

1,300

2,000

1,100

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