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You have been hired by Cool Waves Pty Ltd, a major global supplier of surfboards, to provide them with advice on pricing, production and profit

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You have been hired by Cool Waves Pty Ltd, a major global supplier of surfboards, to provide them with advice on pricing, production and profit maximisation. The company has recently introduced a new line of surfboards that enjoy patent protection. The company CEO has provided the following limited data to assist with you: Table 1: Output and Cost prole for Cool Waves Pty Ltd Q (no. surfboards} Total Fixed Cost Total Variable Cost 0 smooo 12,000 $300,000 $397,600 24,000 5 300,000 $868,000 36.000 $300,000 48.000 $300,000 60,000 $300,000 72.000 $300,000 96.000 $300,000 1 20,000 5 300300 144.000 $300,000 156,000 $300,000 1 68,000 5 300300 130300 $300,000 1 9 2, 000 s 300300 204.000 $300,000 2 16,000 5300300 2 2 8,000 5 300'000 The total variable cost function for the new line of surfboards is given by the following functional form: $100,000 + (x)Q + MOE The demand for surfboards is given by the following function: P =5320 - 0.00150 (a) Using Table 1, the functional form for total variable costs and simultaneous equations, and the demand function provided calculate total variable cost, total cost, total revenue, total profit, marginal revenue, average cost, marginal cost, and marginal profit for each level of output (Q) an illustrate your answers in a table. (10 marks) (please include all decimal places) (b) Show how the prot maximising output, price and profit for this rm can be calculated using marginal analysis and show workings. (5 marks) (c) Calculate the optimal prot margin for this rm and show workings. (1 mark) (d) What would the competitive price and competitive output level be in this market? Show workings. (4 marks) (e) Calculate the deadweight loss for the consumer and the producer and the amount of surplus transferred from the consumer to the producer and show workings. (6 marks) (f) Calculate the net gain for the producer by being a monopolist as compared to the competitive market outcome and show workings (2 marks)

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