$2.$ Exercise $11\mathrm{.}3$

The Lumins Lamp Company, a producer of old$-$style oil lamps, estimated the following demand function for its product:

Q$=240,00020,000$PQ$=240,00020,000$P

where Q is the quantity demanded per year and P is the price per lamp. The firm$$s fixed costs are $$12,000$ and variable costs are $$3\mathrm{.}00$ per lamp.

What is the total revenue $($TR$)$ function in terms of Q$?$

$240,000$Q$$Q$220,000240,000$Q$$Q$220,000$

$12$Q$$Q$220,00012$Q$$Q$220,000$

Q$$Q$220,000$Q$$Q$220,000$

$240,000$Q$20,000$Q$2240,000$Q$20,000$Q$2$

What is the marginal revenue $($MR$)$ function?

$240,00040,000$Q$240,00040,000$Q

$1$Q$10,0001$Q$10,000$

$12$Q$10,00012$Q$10,000$

$240,000$Q$10,000240,000$Q$10,000$

What is the total cost $($TC$)$ function in terms of Q$?$

$3\mathrm{.}00$Q$3\mathrm{.}00$Q

$12,000+3\mathrm{.}00$Q$12,000+3\mathrm{.}00$Q

$3\mathrm{.}00$Q$23\mathrm{.}00$Q$2$

$12,000$Q$+3\mathrm{.}00$Q$212,000$Q$+3\mathrm{.}00$Q$2$

What is the marginal cost $($MC$)$ function?

$3\mathrm{.}003\mathrm{.}00$

$6$Q$6$Q

$12,000+3\mathrm{.}00$Q$12,000+3\mathrm{.}00$Q

$12,000+6$Q$12,000+6$Q

Which of the following is an equation for total profits $($$)$ in terms of Q$?$

$=$Q$220,000+15$Q$=$Q$220,000+15$Q

$=$Q$220,000+15$Q$12,000$$=$Q$220,000+15$Q$12,000$

$=$Q$220,000+9$Q$12,000$$=$Q$220,000+9$Q$12,000$

$=$Q$220,000+9$Q$=$Q$220,000+9$Q

Profits are maximized when output is

$$and the price is

$.$ Total profits at this level are

$.$

What model of market pricing behavior has been assumed in this problem?

Monopoly

Pure competition