A firm has demand equation Q = 10 - 2P. The firm must sell an integer quantity of a product and charge the same price per unit of product for all units sold. It costs the firm $2 to produce and sell each unit of product that it sells. The firm acts to maximize its total profits. Calculate these: Price per unit____ quantity of units_ total profits_______.

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Insha FatimaLv10

28 Sep 2019

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A firm has a demand function Q=10 - P. The firm has constant long-run average costs of production equal to $4. The firm must sell each unit of output for the same price per unit, and the firm must produce and sell an integer amount of output. Calculate profit-maximizing values for each of the following.

a) Price

b) Quantity

c) Total profits

d) Profit margin

greycaribou488

A firm sells cups in two fake countries, Noland and Yesville. Price discrimination is illegal in Noland and in Yesville. But, the price per cup can be different in Noland than it is in Yesville.

Demand for the firm's cups in Noland is Q = 10 - 2P

Demand for the firm's cups in Yesville is Q = 8 - P

In the above equations, "Q" is the quantity of cups and "P" is the price per cup

The firm must sell a whole number amount of cups in each country (no fractions of cups)

It cost the firm $2 to make and deliver each cup it sells.

The firm wishes to maximize total profits. Calculate profit-maximizing values for:

(Show your calculations to receive credit for your answers)

a) In Noland: Price per cup, the quantity of cups, total profits in Noland

b)In Yesville: Price per cup, the quantity of cups, total profits in Yesville

silvercoyote133

(18 points) Demand Estimation and Profit Maximization.

Firm A usually charges $200 for its product and sells 1530 units per week. In a market experiment it raises it price to $215 and sells 1020 units per week.

1. (3 points) Assuming that firm A’s demand function is linear (i.e., Q(P)=a-bP), estimate its demand function.

2. (3 points) Firm A has fixed costs of $16,634 per week and variable costs of $147 per unit. What is its cost function?

3. (3 points) What is firm A’s profit function?

4. (3 points) Calculate the profit maximizing quantity, Q^*, that firm A should produce

5. (3 points) Calculate the profit maximizing price that firm A should charge

6. (3 points) Calculate profits at the profit maximizing price