What are the profit-maximizing price and output levels

Assignment Help Microeconomics
Reference no: EM13901134

Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for the product is expressed as Q = 5000 - 25P where Q is the number of vacuum cleaners per year and P is in dollars. Cost estimation processes have determined that the firm's cost function is represented by TC = 1500 + 20Q + 0.02Q2.

Show all of your calculations and processes. Describe your answer for each question in complete sentences, whenever it is necessary.

What are the profit-maximizing price and output levels? Explain them and calculate algebraically for equilibrium P (price) and Q (output). Then, plot the MC (marginal cost), D (demand), and MR (marginal revenue) curves graphically and illustrate the equilibrium point.

How much economic profit do you expect that Robert's company will make in the first year?

Do you expect this economic profit level to continue in subsequent years? Why or why not?

Verified Expert

The first question required to use profit maximization in amonopolistic economy to find equilibrium price and output and theprofit made.

Reference no: EM13901134

Questions Cloud

Social psychology application : Social Psychology Application Because social psychology is interested in the behavior of individuals in social situations, its theories and concepts are of great interest outside the field of psychology.
Secretary in the federal government or united nations : If asked to become the minister or secretary in the Federal Government or United Nations in charge of doing something about global warming, what policies could someone attempt to implement? Why?
Identify potential activity driver that used for the tracing : Identify which cost assignment method would likely be used to assign the costs of each of the preceding activities. When driver tracing is selected, identify a potential activity driver that could be used for the tracing.
Notion of a systemic interconnection : The final screen in Lesson 9 Lesson Presentation introduces the notion of a systemic interconnection between greenhouse gasses, ozone depletion, and acid deposition. The lesson screen speaks of one common root source for each of these issues. That..
What are the profit-maximizing price and output levels : What are the profit-maximizing price and output levels? Explain them and calculate algebraically for equilibrium P (price) and Q (output). Then, plot the MC (marginal cost), D (demand), and MR (marginal revenue) curves graphically and illustrate t..
Identify which product cost definition is being used : Based on your operational model, identify which product cost definition is being used: value-chain, operating, or product (manufacturing).
What have been the effects of the bill of rights? : What have been the effects of the Bill of Rights?
Summarize the two articles : Summarize the two articles and explain how does it link to supply chain management.(no more than 300 words
How has englehardt''s concept of victory culture : How has Englehardt's concept of victory culture

Reviews

Write a Review

Microeconomics Questions & Answers

  Building a model of the demand for water

"Building a model of the demand for water in los Angeles" by CoachScienceTurkey6784

  Does this regression equation provide evidence

a. Does this regression equation provide evidence of a statistically significant relation between voter support for Proposition 103 in a county and changes in average auto premiums affected by Proposition 103 in that county? Perform an F-test at the ..

  Describe how change in interest rates will affect united

the federal reserve decreases the money supply in the united states causing interest rates to increase.show and explain

  How similar was the decision-making process to one

identify a time in your life when you had to make a personal or professional decision such as buying a home changing

  Efficient level of a negative externality

Characterize this as an example of a positive or a negative externality and the efficient level of a negative externality is always a positive amount.

  Discuss china in terms of being the middle kingdom

directions be sure to make an electronic copy of your answer before submitting it to ashworth college for grading.

  Average cost includes both fixed and variable costs

Average cost includes both fixed and variable costs

  Discuss the implications of risk-return trade-off

Discuss the implications of risk-return trade-off with respect to your overall investment portfolio as you approach retirement age. Are there any assets that you would avoid investing in as you near retirement age?

  What does characteristics of a good brand name include

Emil Flores won't buy any coffee except "Blue Mountain"--a relatively expensive type that few stores sell. He used to have to drive about 10 miles out of his way to buy it at a small shop--but now he has persuaded his local supermarket manager to ..

  Consumers reduce autonomous consumption

Consumers reduce autonomous consumption.

  What types of charts seem most appropriate for analyzing

what types of charts seem most appropriate for analyzing sales trends?

  Aura has a utility function

Aura has a utility function given by U(X, Y) = 4X0.5Y0.5. The current prices of X and Y are $25 and $50, respectively. Laura currently has an income of $750 to spend on X and Y.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd