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businesseconomicseconomics questions and answersproblem 4 you are the manager of a monopoly, and your economists have estimated your demand and cost functions as p = 250 − 3q, the total cost is tc=600+50q+〖2q〗^2 and the marginal cost is given by mc=50+4q. a. enunciate the formula: mr for linear inverse demand. b. use the formula from question 1, to find the marginal revenue mr when the inverse demand is
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Question: Problem 4 You Are The Manager Of A Monopoly, And Your Economists Have Estimated Your Demand And Cost Functions As P = 250 − 3Q, The Total Cost Is TC=600+50Q+〖2Q〗^2 And The Marginal Cost Is Given By MC=50+4Q. A. Enunciate The Formula: MR For Linear Inverse Demand. B. Use The Formula From Question 1, To Find The Marginal Revenue MR When The Inverse Demand Is
Problem 4
You are the manager of a monopoly, and your economists have estimated your demand and cost functions as P = 250 − 3Q, the total cost is TC=600+50Q+〖2Q〗^2 and the marginal cost is given by MC=50+4Q.
a. Enunciate the Formula: MR for Linear Inverse demand.
b. Use the formula from question 1, to find the marginal revenue MR when the inverse demand is P=250-3Q.
c. What’s the principle of the Monopoly Output Rule?
d. Use the principle enunciated in question 3 to find the output Q* that the firm should produce to maximize its profit.
e. What’s the Monopoly Pricing Rule?
f. Use the Monopoly Pricing Rule from question 5 to find the price P* that the firm should charge when maximizing its profit.
g. Determine the firm’s total revenue (TR ), total cost (TC ) and maximum profits (Π ).
h. Is demand elastic, inelastic, or unit elastic at the profit-maximizing price–quantity combination? Explain your answer!
