Robert''s new way vacuum cleane, Macroeconomics

Assignment Help:

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.

1. 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.

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

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


Related Discussions:- Robert''s new way vacuum cleane

Lorenz curve, what do we mean when we say export are exogenous and import a...

what do we mean when we say export are exogenous and import are endogeneos?

Balance of payment, what causes a shift in the balance of payment?

what causes a shift in the balance of payment?

Tuckman group stage process schema, Consider the Tuckman group stage proces...

Consider the Tuckman group stage process schema. Identify specific actions a manager can take at each stage of the process to best help a group reach the performing stage. Respond

IS/LM MODEL, Explain the chain reactions (primary and secondary effects) an...

Explain the chain reactions (primary and secondary effects) and show graphs of the following variables: (i) taxes increases, (ii) government spending increases and (iii)repo ra

Pros and cons of var, Since their inception, VAR models have been at the ce...

Since their inception, VAR models have been at the centre of many controversies associated with econometric modelling. The recurring criticism throughout history is due to the mode

Shortage graph, I am writing a macroeconomics commentary about a supply sho...

I am writing a macroeconomics commentary about a supply shock-induced inflation, can I include a shortage diagram I learnt in microeconomics and just change demand and supply to AD

Maximizing tax revenue, Normal 0 false false false EN-I...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

What are the comparative benefits, What are the comparative benefit The...

What are the comparative benefit The idea of comparative benefit defines that a nation must specialise in the industries in which it has a comparative advantage. Comparative be

Kind of goods also the mrs, Suppose the utility function is given by: u(x,y...

Suppose the utility function is given by: u(x,y) = 3x+4y. What kind of goods are X and Y and what is the MRS?

Write Your Message!

Captcha
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