### What price do you think this firm should charge

##### Reference no: EM1315169

Q. Overheard at the water cooler: "The demand also cost estimates which were provided at the meeting are very useful [Q - 90 - 6.5P also TC = 150 + 3.5Q]. Unfortunately Illustrate what we didn't realize at the time was which our fixed costs were underestimated by at least 30 percent. This means which we'll have our price upward by at least 30 percent to cover the added fixed cost. In any case, there is no way in the world which we can survive by charging less than \$9 for our product."

a. Comment on this statement. Do you agree with the speaker? Elucidate. Illustrate your answer with utilize of a graph indicating the firm's short-run cost structure.

b. Illustrate what price do you think this firm should charge if it wants to maximize its short-run profit?

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