You are given the following data for your firm, which sells a patented super-absorbent cleaning towel for use in large retail complexes (called “One Wring to Rule the Mall” ©).QPTC0$215$2,700.0010$208$4,062.5020$201$5,180.0030$194$6,157.5040$187$7,100.0050$180$8,112.5060$173$9,300.0070$166$10,767.5080$159$12,620.0090$152$14,962.50100$145$17,900.00Determine equations for P=f(Q), MR=f(Q), ATC=f(Q, Q2), AVC=f(Q, Q2), MC=f(Q, Q2). Recall that your marginal equations should be derivatives of your totals!Determine the profit-maximizing price and quantity. (Since MC is in terms of Q2, solving with calculus and algebra can be messy unless you know the quadratic formula. Your table should give an exact answer.)How much total profit would your firm earn if you set P and Q according to part b?Describe the competitiveness of the market by calculating the Lerner index.

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Answered: You are given the following data for…

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

You are given the following data for your firm, which sells a patented super-absorbent cleaning towel for use in large retail complexes (called “One Wring to Rule the Mall” ©).

Determine equations for P=f(Q), MR=f(Q), ATC=f(Q, Q²), AVC=f(Q, Q²), MC=f(Q, Q²). Recall that your marginal equations should be derivatives of your totals!
Determine the profit-maximizing price and quantity. (Since MC is in terms of Q², solving with calculus and algebra can be messy unless you know the quadratic formula. Your table should give an exact answer.)
How much total profit would your firm earn if you set P and Q according to part b?
Describe the competitiveness of the market by calculating the Lerner index.