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Dr Leona Williams a well know Plastic Surgeon, has a reputation for being one of the best surgeons for reconstructive nose surgery. Dr Williams enjoys a rather substantial degree of market power in this market. She has estimated demand for her work to be
Q= 480 - 0.2P
where Q is the number of nose operations performed monthly and P is the price of a nose operation.
The average variable cost function for reconstructive surgery is estimated to be:
AVC = 2Q - 15Q + 400
Where AVC is average variable cost (measured in dollars), and Q is the number of operations per month. The Doctor's fixed costs each month are $8,000.
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