The Madison Corporation, a monopolist, receives a report from a consulting firm concluding that the demand function for its product is
Q = 78 - 1.1P + 2.3Y + 0.9A
where Q is the number of units sold, P is the price of its product (in dollars), Y is per capita income (in thousands of dollars), and A is the firm's advertising expenditure (in thousands of dollars). The firm's average variable cost function is
AVC = 42 - 8Q + 1.5Q2
where AVC is average variable cost (in dollars).
a Can we determine the firm's marginal cost curve?
b. Can we determine the firm's marginal revenue curve?
c. If per capita income is $4,000 and advertising expenditure is $200,000, can we determine the price and output where marginal revenue equals marginal cost? If so, what are they?