Managerial Economics 13th Edition by James McGuigan,Charles Moyer,Frederick Harris

Exercise 6

Ajax Cleaning Products is a medium-sized firm operating in an industry dominated by one large firm-Tile King. Ajax produces a multiheaded tunnel wall scrubber that is similar to a model produced by Tile King. Ajax decides to charge the same price as Tile King to avoid the possibility of a price war. The price charged by Tile King is $20,000.
Ajax has the following short-run cost curve:
TC = 800,000 - 5,000Q + 100Q 2
a. Compute the marginal cost curve for Ajax.
b. Given Ajax's pricing strategy, what is the marginal revenue function for Ajax
c. Compute the profit-maximizing level of output for Ajax.
d. Compute Ajax's total dollar profits.