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upstairsatomLv1
29 Mar 2021
Your firm faces the following demand curve: Q(P)=186,624/P2. Your firm’s cost function is TC(Q)=27Q
A. Calculate the price elasticity of demand (as a function of price)
B. Calculate the profit function
C. Calculate the profit-maximizing quantity Q*
D. Calculate the profit-maximizing price P*
E. Calculate profits at the profit-maximizing price and quantity
F. Calculate the markup on price at the profit-maximizing price Note: Markup on Price=(P-MC)/P
Your firm faces the following demand curve: Q(P)=186,624/P2. Your firm’s cost function is TC(Q)=27Q
A. Calculate the price elasticity of demand (as a function of price)
B. Calculate the profit function
C. Calculate the profit-maximizing quantity Q*
D. Calculate the profit-maximizing price P*
E. Calculate profits at the profit-maximizing price and quantity
F. Calculate the markup on price at the profit-maximizing price Note: Markup on Price=(P-MC)/P
2 Jun 2021
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