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A firm is operating in a monopolistically competitive market faces demand and marginal revenue curves as given below:
P = 10 - 0.1Q MR = 10 - 0.2Q
The firm's total and marginal cost curves are:
TC = - 10Q + 0.0333Q3 + 130 MC = -10 + 0.0999Q2,
where P is in dollars per unit, output rate Q is in units per time period, and total cost C is in dollars.
If P= $8.68 and the firm produces Q=13.17, what is the Lerner index of monopoly power for this firm?
The payments are made semiannually based on the exact day count and 360 days in a year. The current period has 181 days. Calculate the next payment each party makes.
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Evaluate the gross profit
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