Question
Assume the following inverted demand function of a firm in the short run: P = 100 - 5Q which yields the MR function as 100
Assume the following inverted demand function of a firm in the short run: P = 100 - 5Q which yields the MR function as 100 - 10 Q. Now assume the total cost function of this firm is : TC = 100 + 160Q - 20Q2
The above cost function yields the MC function as 160 - 40Q.
(a) What price would this firm charge and what quantity would it sell?
(b) Is this firm earning a profit or incurring a loss? What is the amount of short-run profit or loss?
Explain fully. Show your work
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Economic Issues and Policy
Authors: Jacqueline murray brux
6th edition
9781337001977, 1285448774, 133700197X, 978-1285448770
