Essay
A firm faces the demand curve, P = 80 - 3Q, and has the cost equation: C = 200 + 20Q, where P = price, C = total cost, and Q = quantity.
(a) Find the optimal quantity and price for the firm.
(b) Now suppose that the demand for the firm’s product changes to: P = 110 – 3Q. Find thenew optimal quantity and price. Has there been an increase or a decrease in demand?
Explain.
Correct Answer:
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Given the new price equation, P = 110 - ...View Answer
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Correct Answer:
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