Answered step by step
Verified Expert Solution
Question
1 Approved Answer
please solve it in 20 mins I will thumb you up (3) Suppose the inverse demand curve for a new product is given by D(q)=2502q,
please solve it in 20 mins I will thumb you up
(3) Suppose the inverse demand curve for a new product is given by D(q)=2502q, marginal revenue is M(q)=2504q, and marginal production cost is c=50. (a) Assuming that the firm received a patent that gives it exclusive rights to sell the product, calculate its optimal output, price, and operating profit. Suppose that the fixed cost of developing the new product is K=5000. (b) Will it invest in developing the product if your answer from (a) holds? (c) Calculate social welfare in the presence of the patent, equal to the sum of consumer surplus and net profit. Does society benefit from the patent (suppose the market would not exist without inventing product)? What if K=10,000Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started