Compute profit-maximizing level of output for ajax

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Reference no: EM1370921

Q. Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one very large firm-Tile King. Ajax produces a multi-headed tunnel wall scrubber that is very similar to a model produced by Tile King. Ajax has decided to charge same price as Tile King to avoid possibility of a price war. price charged by tile King is $20,000.
Ajax has following short-run cost curve:
TC=800,000 - 5,000 Q + 100Q 2

a. Compute marginal cost curve for Ajax

b. Provided Ajax's pricing strategy, illustrate what is marginal revenue function for Ajax?

c. Compute profit-maximizing level of output for Ajax

d. Compute Ajax's total dollar profits.


Reference no: EM1370921

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