Jones Company operates within a monopolistically competitive industry. The estimated demand for its products is given by

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Jones Company operates within a monopolistically competitive industry. The estimated demand for its products is given by the following inverse demand function

P = 1760 – 12Q

It finance department has estimated its total cost function as

TC = 24,000 + 5 Q – 15 Q2 + 0.333 Q3

a. What is the level of output that maximizes short run profits?

b. What is the profit maximizing price?

c. What are total profits?

d. What is the effect of an increase in fixed costs of $5000 on equilibrium price and output?

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Economics

ISBN: 978-0134106243

6th edition

Authors: R. Glenn Hubbard

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Question Posted: Sep 19, 2013 03:00 AM

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Jones Company operates within a monopolistically competitive industry. The estimated demand for its products is given by

Question:

Step by Step Answer:

a P 1760 12Q TR PQ TR 1760 12QQ TR 1760Q 12Q2 Use first derivative to find MR MR 1760 24Q TC 2...View the full answer

Economics

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