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The demand and cost function for a company are estimated to be as follows:  P = 100 - 80Q TC = 50 + 80Q -10Q^2 + 0.6Q^3 A. What price should the company charge if it wants to maximize its profit in the short run? B. What price should it charge if it wants to maximize its revenue in the short run?

The demand and cost function for a company are estimated to be as follows:  P = 100 - 80Q TC = 50 + 80Q -10Q^2 + 0.6Q^3 A. What price should the company charge if it wants to maximize its profit in the short run? B. What price should it charge if it wants to maximize its revenue in the short run?

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter16: Information, Risk, And Insurance
Section: Chapter Questions
Problem 18RQ: What are some of the metrics economists use to measure health outcomes?
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The demand and cost function for a company are estimated to be as follows: 

P = 100 - 80Q

TC = 50 + 80Q -10Q^2 + 0.6Q^3

A. What price should the company charge if it wants to maximize its profit in the short run?

B. What price should it charge if it wants to maximize its revenue in the short run?

Quantity Total Cost Total Cost 50 121 500 175 450 3 216 400 4 248 350 5 275 300 300 250 7 326 200 8 357 150 397 100 10 450 50
Transcribed Image Text:Quantity Total Cost Total Cost 50 121 500 175 450 3 216 400 4 248 350 5 275 300 300 250 7 326 200 8 357 150 397 100 10 450 50
Q Total Marginal Fixed Variable Total Marginal Quantity Price Revenue Revenue Cost Cost Cost Cost Profit 100 50 50 -50 1 92 92 92 50 71 121 71 -29 84 168 76 51 124 175 54 -7 3 76 228 60 52 164 216 41 12 4 68 272 44 53 195 248 32 24 5 60 300 28 54 221 275 27 25 52 312 12 55 245 300 25 12 7 44 308 -4 56 270 326 26 -18 8 36 288 -20 57 300 357 31 -69 9 28 252 -36 58 339 397 40 -145 10 20 200 -52 59 391 450 53 -250
Transcribed Image Text:Q Total Marginal Fixed Variable Total Marginal Quantity Price Revenue Revenue Cost Cost Cost Cost Profit 100 50 50 -50 1 92 92 92 50 71 121 71 -29 84 168 76 51 124 175 54 -7 3 76 228 60 52 164 216 41 12 4 68 272 44 53 195 248 32 24 5 60 300 28 54 221 275 27 25 52 312 12 55 245 300 25 12 7 44 308 -4 56 270 326 26 -18 8 36 288 -20 57 300 357 31 -69 9 28 252 -36 58 339 397 40 -145 10 20 200 -52 59 391 450 53 -250
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