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Q. Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one very large firm Tile King. Production of a Ajax is multi-headed tunnel wall scrubber that is very similar to a model produced by Tile King. Ajax has decided to charge the same price as Tile King to avoid the possibility of a price war. The price charged by tile King is $20,000.
Ajax has the following short-run cost curve:
TC=800,000 - 5,000 Q + 100Q 2
a. Calculate the marginal cost curve for Ajax
b. Given Ajax's pricing strategy, illustrate what is the marginal revenue function for Ajax?
c. Calculate the profit-maximizing level of output for Ajax
d. Calculate Ajax's total dollar profits.
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