Profit-maximizing price-quantity and level of advertising

Assignment Help Business Economics

Reference no: EM131097649

The inverse demand a monopoly faces is p = 100−Q+A0.5, where Q is quantity, p is the price, and A is its level of advertising. Its marginal cost of production is constant at $10 (no fixed cost), and its cost of a unit of advertising is $1. (a) Write down the monopolist’s profit equation. (b) Solve for the monopolist’s profit-maximizing price, quantity and level of advertising.

Reference no: EM131097649

Questions Cloud

Write virtually any message on blank slate of human nature : A nativist would claim that the chief determining factor of behavior and other psychological traits - experience can write virtually any message on the blank slate of human nature.

Create a high-level state machine for a simple data : Be sure to explicitly handlc all possible combinations of die three input bits

Marginal cost is constant and equal to the average cost : A monopolist sells music CDs. It has a constant marginal and average cost of $20. It faces two groups of potential customers: honest and dishonest customers. Given that the marginal cost is constant and equal to the average cost, does the monopolist ..

Creating a training program for all employees : You work in a medium-sized organization (200-300 people). You head a team that has been tasked with creating a training program for all employees on the usage of a new company-wide software program.

Profit-maximizing price-quantity and level of advertising : The inverse demand a monopoly faces is p = 100−Q+A0.5, where Q is quantity, p is the price, and A is its level of advertising. Its marginal cost of production is constant at $10 (no fixed cost), and its cost of a unit of advertising is $1. (a) Write ..

Economy will experience high growth-normal growth : Assume that in the next year the economy will experience high growth (20% probability), normal growth (40% probability), or a recession (40% probability). According to these numbers, what is the expected return on stocks over the next year? If one-ye..

What is masculinity : What is masculinity and how is manhood portrayed in Hip Hop and is that portrayal accurate or realistic

Greater effect on the consumer price index : What is the CPI? Which do you think has a greater effect on the consumer price index: a 10 percent increase in the price of chicken, or a 10 percent increase in the price of caviar? Why?

Design a reaction timer system tjrnt measures the time : Assume that the clock input has a frequency of I kHz. Do not use a timer component in the data path

User Account

All Pages