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Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firm Tile King. Ajax produces a multi-headed tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides 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:
800,000 - 5,000Q + 100Q2.
A. Compute the marginal cost curve for Ajax.
B. Given Ajax's pricing strategy, what is the marginal revenue function for Ajax?
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