Suppose the doll company American Girl has an inverse demand curve of P = 150 – 0.25Q, where Q measures the quantity of dolls per day and P is the price per doll. There production function equals Q = L^0.5K^0.5, they pay wages of 35 and they pay capital rates of 140. What is their daily long run profit at the profit-maximizing output level?
Suppose the doll company American Girl has an inverse demand curve of P = 150 – 0.25Q, where Q measures the quantity of dolls per day and P is the price per doll. There production function equals Q = L^0.5K^0.5, they pay wages of 35 and they pay capital rates of 140. What is their daily long run profit at the profit-maximizing output level?
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter9: Market Structure And Long-run Equilibrium
Section: Chapter Questions
Problem 1MC
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Suppose the doll company American Girl has an inverse demand curve of P = 150 – 0.25Q, where Q measures the quantity of dolls per day and P is the price per doll. There production function equals Q = L^0.5K^0.5, they pay wages of 35 and they pay capital rates of 140. What is their daily long run profit at the profit-maximizing output level?
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