# Question

Ajax, Inc. is a monopolist. The estimated demand function for its product is Qd = 120 – 0.8P + 12Y + 4A

Where Qd denotes quantity demanded, P denotes price, Y denotes personal income (in thousands of dollars), and A denotes advertising expenditures in hundreds of dollars.

Ajax’s marginal cost function is given as

MC = 21 + 4Q

Assume Y equals 3 and A equals 3 and fixed costs equal $1000

a. What is the inverse demand function? (The equation demand equation in the form

P = a – bQd)?

b. What is the profit maximizing price and quantity of output for Ajax, assuming it is an unregulated monopoly? What are its profits?

c. If fixed costs increase to $1200, what will happen to equilibrium price and quantity?

Where Qd denotes quantity demanded, P denotes price, Y denotes personal income (in thousands of dollars), and A denotes advertising expenditures in hundreds of dollars.

Ajax’s marginal cost function is given as

MC = 21 + 4Q

Assume Y equals 3 and A equals 3 and fixed costs equal $1000

a. What is the inverse demand function? (The equation demand equation in the form

P = a – bQd)?

b. What is the profit maximizing price and quantity of output for Ajax, assuming it is an unregulated monopoly? What are its profits?

c. If fixed costs increase to $1200, what will happen to equilibrium price and quantity?

## Answer to relevant Questions

Using the balance sheet of Angelina's Jewelry Company at the end of July shown below, calculate all four financial ratios (quick, current, debt, and debt-to-equity) for the business. Assets Liabilities Current assets Short ...The Milling Department uses standard machine hours to allocate overhead to products. Budgeted volume for the year was 36,000 machine hours. A flexible budget is used to set the overhead rate. Fixed overhead is budgeted to be ...Calculate the current price of a bond that pays semi-annual coupon payments and has the following characteristics: (a) NPER—15, (b) Coupon Payments--$73, and (c) Market Rate of Interest—13%.the market rate. Using Excel's ...The question this week will force each and everyone to look inside ourselves and determine where we want our future of our society to go. In 1913, the Sixteenth Amendment was passed allowing Congress to put in place an ...From the interaction, does it seem to you that Alan is actively listening? Why or why not?Post your question

0