You are the manager of a monopolistically competitive firm, and your demand and cost functions are given by Q = 36 - 4P and C(Q) = 124 - 16Q + Q2.
a. Find the inverse demand function for your firm’s product.
b. Determine the profit- maximizing price and level of production.
c. Calculate your firm’s maximum profits.
d. What long- run adjustments should you expect? Explain.