In Japan, the market of energy drink is a monopolistic market. The demand function is = 10
Question:
In Japan, the market of energy drink is a monopolistic market. The demand function is = 10− and the total cost function is =2+2+4. Please show a solution for each question below.
a) What is the function of average cost per unit?
b) To maximize profit, what are the price and quantity produced in this energy drink market in Japan?. Then please draw a graph to show the price and quantity to maximize profit. Keep in mind that the graph must have Marginal Cost, Average Revenue (or Demand function), and Marginal Revenue. (Do not for get to verify the Second Order Condition)
c) If the industry produces and sells at price and quantity from (b), what are the total cost, the total revenue, and the total profit?
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe