65 630
Assignments Done
99,2%
Successfully Done
In October 2018

Answer to Question #63242 in Microeconomics for kamna

Question #63242
The Lumins Lamp Company, a producer of old-style oil lamps, estimated the following demand function for its product:

Q = 120,000 – 10,000P

where Q is the quantity demanded per year and P is the price per lamp.

The firm’s fixed costs are $12,000 and variable costs are $1.50 per lamp.

a. Write an equation for the total revenue (TR) function in terms of Q.
b. Specify the marginal revenue function.
c. Write an equation for the total cost (TC) function in terms of Q.
d. Specify the marginal cost function.
e. Write an equation for total profits (π) in terms of Q. At what level of output (Q) are total profits maximized? What price will be charged? What are total profits at this output level?
f. Check your answers in Part (e) by equating the marginal revenue and marginal cost functions, determined in Parts (b) and (d), and solving for Q.
g. What model of market pricing behavior has been assumed in this problem?

Expert's answer

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be first!

Leave a comment

Ask Your question

Submit
Privacy policy Terms and Conditions