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Q. A consulting company estimated market demand and supply in a perfectly competitive industry and obtained the following results:
Qd = 25,000 - 5,000P + 25MQs = 240,000 + 5,000P - 2,000PI
where P is the price, M is the income, and PI is the price of a key input. The forecasts for the next year are M = $10,000 and PI = $20. Average variable cost is estimated to be AVC = 14 - 0.0048Q + 0.00000002Q2. Total fixed cost will be $1,276,000 next year. What will the firm's profit (loss) be for next year?
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