# Question: A firm faces the following average revenue demand curve P

A firm faces the following average revenue (demand) curve:

P = 100 â€“ 0.01Q

Where Q is weekly production and P is price, measured in cents per unit. The firmâ€™s cost function is given by C = 50Q + 30,000. Assuming the firm maximizes profits,

a. What is the level of production, price, and total profit per week?

b. If the government decides to levy a tax of 10 cents per unit on this product, what will be the new level of production, price, and profit?

P = 100 â€“ 0.01Q

Where Q is weekly production and P is price, measured in cents per unit. The firmâ€™s cost function is given by C = 50Q + 30,000. Assuming the firm maximizes profits,

a. What is the level of production, price, and total profit per week?

b. If the government decides to levy a tax of 10 cents per unit on this product, what will be the new level of production, price, and profit?

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