The Bramwell Corporation has estimated its demand function and total cost function to be as follows:
Q = 25 - 0.05P
TC = 700 + 200Q
Answer the following questions either by developing demand and cost schedules {Hint: Use quantities from 1 to 14) or by solving the equations.
a. What will be the price and quantity if Bramwell wants to
1. Maximize profits?
2. Maximize revenue?
3. Maximize revenue but require the profit to be a minimum of $300?
b. Now assume the cost function is TC = 780 + 200Q while the demand function remains the same. What will the price and quantity be if Bramwell wants to
1. Maximize profits?
2. Maximize revenue?
3. Maximize revenue but require the profit to be a minimum of $300?
c. Why are the answers the same in a(1) and b(1) but different in a(3) and b(3)?