The Poster Bed Company believes that its industry can best be classified as monopolistically competitive. An analysis of the demand for its canopy bed has resulted in the following estimated demand function for the bed: P=1,265-9Q The cost analysis department has estimated the total cost function for the poster bed as TC=-15Q² +5Q+24,000 Short-run profits are maximized when the level of output is The total profit at this price-output level is S The point price elasticity of demand at the profit-maximizing level of output is The level of fixed costs the firm is experiencing on its bed production is What is the impact of a $5,000 increase in the level of fixed costs on the price charged, output produced, and profit generated? Price Charged Output Produced Profits Generated Increase No change Decrease and the price is S O O

The Poster Bed Company believes that its industry can best be classified as monopolistically competitive. An analysis of the demand for its canopy bed has resulted in the following estimated demand function for the bed: P=1,265-9Q The cost analysis department has estimated the total cost function for the poster bed as TC=-15Q² +5Q+24,000 Short-run profits are maximized when the level of output is The total profit at this price-output level is S The point price elasticity of demand at the profit-maximizing level of output is The level of fixed costs the firm is experiencing on its bed production is What is the impact of a $5,000 increase in the level of fixed costs on the price charged, output produced, and profit generated? Price Charged Output Produced Profits Generated Increase No change Decrease and the price is S O O

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Give only typing answer with explanation and conclusion The market demand for a monopoly firm is estimated to be: Qd = 100,000 - 500P + 2M + 500PR where Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2016. The average variable cost function is estimated to be AVC = 520 - 0.03Q + 0.000001Q2 Total fixed cost in 2016 is expected to be $4 million. The profit-maximizing price for 2016 is $80. $100. $260. $520. $560.
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Note: Hand written solution is not accepted.
The demand function for a firm's domestic and foreignmarkets are:AT) (5.4)P¡ = 50 - 401Pa=40- 5Q2and the total cost function is:TC= 25 + 120, where Q = Qi + Q.a/ Determine the prices needed to maximize profit with and without pricediscrimination;b/ Find the maximum profit values in these two cases and give your comment.
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and the cost function of the second firm is , where are all positive parameters. The demand function in this industry is where α C(q₁) = A * qu C(92) = Bq₂ (A, B, a, ß) Q = Dp (D,y)
In the 1928, Knoxville was served by a single railroad line. Because alternative forms of transportation were not close substitutes for rail transportation in 1928, this railroad had a transportation monopoly in Knoxville. The estimated monthly fixed cost associated with operating a railroad was $1,200. In addition, there was a constant average variable cost and marginal cost of $0.02 per ton-mile associated with the railroad's operation. The estimated monthly demand for transportation on the railroad was: Qd = q = 80,000 - 1,000,000P where Qd was the monthly quantity demanded in ton-miles and P was the price per ton-mile in dollars. Based upon the above equation, answer the following questions: a. What is the profit-maximizing price and quantity? b. Would a private company build the railroad? c. What is the socially optimal price and quantity?