The Market Demand for a Type of Carpet Known as KP-7

Essay

The market demand for a type of carpet known as KP-7 has been estimated as:
P = 40 - 0.25Q,
where P is price ($/yard) and Q is rate of sales (hundreds of yards per month). The market supply is expressed as:
P = 5.0 + 0.05Q.
A typical firm in this market has a total cost function given as:
C = 100 - 20.0q + 2.0q².
a. Determine the equilibrium market output rate and price.
b. Determine the output rate for a typical firm.
c. Determine the rate of profit (or loss) earned by the typical firm.