Answer in Microeconomics for kainat #112417
April 21st, 2023
a) Total revenue: “TR=Ptimes Q”
Marginal revenue: TR2-TR1, and so on.
b)To maximize profit we need MR=MC.
From the information provided we can find demand curve equation:
“TP=TR-TC=Qtimes P – 5Q = 26Q-0.0002Q-5Q=21Q-0.0002Q^2.”
Tomaximaze profit we need to find the derevative of this equation and solve it to 0:
With that quantity the price will be:
“P=26-0.0002times 52,500 = 10.5.”