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Refer to the Following:
the Market Demand for a Monopoly Qd=100,000500P+2M+5000PRQ _ { d } = 100,000 - 500 P + 2 M + 5000 P _ { R }

Question 49

Multiple Choice

Refer to the following:
The market demand for a monopoly firm is estimated to be:
Qd=100,000500P+2M+5000PRQ _ { d } = 100,000 - 500 P + 2 M + 5000 P _ { R }
where
QdQ _ { d } is quantity demanded, P is price, M is income, and
PRP _ { R } is the price of a related good. The manager has forecasted the values of M and
PRP _ { R } will be $50,000 and $20, respectively, in 2015.
The average variable cost function is estimated to be
AVC=5200.03Q+0.000001Q2A V C = 520 - 0.03 Q + 0.000001 Q ^ { 2 }
Total fixed cost in 2015 is expected to be $4 million.
-The profit-maximizing price for 2015 is


A) $100.
B) $260.
C) $80.
D) $520.
E) $560.

Correct Answer:

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