Question
The demand a monopoly faces is p=100Q+A0.5, where Q is the quantity, p is the price, and A is the level of advertising. Marginal cost
The demand a monopoly faces is
p=100Q+A0.5,
where Q is the quantity, p is the price, and A is the level of advertising. Marginal cost is a constant $10 per unit, the cost per unit of advertising is $1, and there are no fixed costs.Part 2Solve for the firm's profit-maximizing price, quantity, and level of advertising.Hint: the profit function must be maximized with respect to two choice variables (Q and A).
Please provide step-by-step calculations for the following:
a). The profit-maximizing quantity ((round your answer to two decimal places)
b). The profit-maximizing for level of advertising ((round your answer to two decimal places)
c). The profit-maximizing price (round your answer to two decimal places)
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