Suppose a firm estimates the demand curve for its product is Q = 120,000-10,000P. Suppose the firm has fixed cost of $12,000 and variable cost per unit (AVC) is $2.00.

A). Write a equation for the total revenue (TR) functions in terms of Q.

B). Specify the marginal revenue function

C).Write a equation for the total cost (TC) function in terms of Q.

D). Specify the marginal cost function

E). Write a equation for the total profits in terms of Q. At what level of output (Q) are total profits maximized? What price will be charged? What are total profits at this output level?

F). Check your answers in part (e) by equating the marginal revenue and marginal cost functions and solving for Q.

G). What market model has been assumed in this problem?