Question
A monopoly firm's inverse demand function is p = 800 4Q + 0.2A , where Q is its quantity, p is its price, and A
A monopoly firm's inverse demand function is p = 800 4Q + 0.2A , where Q is its quantity, p is its price, and A is the level of advertising. The firm's marginal cost of production is 2, and its cost for a unit of advertising is 1.
What are the firm's profit maximising price, quantity, and level of advertising?
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International Economics Theory and Policy
Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz
9th Edition
978-0132146654, 0132146657, 9780273754091, 978-0273754206
