Suppose that the demand facing the local franchise is P = 100 0.001Q. Marginal revenue is

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Suppose that the demand facing the local franchise is P = 100 − 0.001Q.

Marginal revenue is MR = 100 − 0.002Q, and marginal (and average) cost is 20.

a. What price and output will maximize the franchise’s operating profit?

b. If average total cost is equal to 70 at the optimal price and output, will profit be negative? If so, should the franchise be subsidized?

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Sports Economics

ISBN: 9780521876612

1st Edition

Authors: Roger D. Blair

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Question Posted: Nov 13, 2024 02:00 AM

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Suppose that the demand facing the local franchise is P = 100 0.001Q. Marginal revenue is

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Sports Economics

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