Question
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)=.001Q2+4Q. The unit cost of advertising is constant at m=1.
What is the optimal output level Q*?
a. 2500 b.2000 c.1500 d.1000
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Managing in a Global Economy Demystifying International Macroeconomics
Authors: John E. Marthinsen
2nd edition
128505542X, 978-1305176157, 1305176154, 978-1285055428
