Question: Can you please answer this. eny explain. 30. You own a patent over a special filter that quickly converts dirty water into drinkable water. This

Can you please answer this.

Can you please answer this. eny explain. 30. You own a patent

eny explain. 30. You own a patent over a special filter that quickly converts dirty water into drinkable water. This patent prevents anyone from competing with your new product, a filtered bottle, that allows anyone to scoop up any water and then drink it. Suppose you face the following demand for fresh water: Qw = 100 - .25Pu. Ignoring the value of the patent, the average cost function of your special bottle is ATC = 24 (i.e., the ATC curve is flat). a. What are the marginal costs of this firm for every level of output? b. In a graph label the axes and draw the demand curve, marginal revenue curve, average total cost curve, and the marginal cost curve. c. Using algebra, calculate the profit maximizing level of output and the profit maximizing price. d. What are the profits of this firm? e. How much would some other firm be willing to pay for the patent? Given this price for the patent, what is the equation of the new total cost function? f. In another graph, redraw the demand, marginal revenue, average total costs, and marginal costs of your firm given the new value of the patent

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!