Demand and cost functions

You are the manager of a monopoly, and your demand and cost functions are given by P = 300 – 3Q and C(Q) = 1,500 + 2Q2, respectively.

a. What price–quantity combination maximizes your firm’s profits?

Price: $[removed]
Quantity: [removed]units

b. Calculate the maximum profits.

$[removed]

d. What price–quantity combination maximizes revenue?

Price: $[removed]
Quantity: [removed]units

e. Calculate the maximum revenues.

$[removed]

A firm sells its product in a perfectly competitive market where other firms charge a price of $90 per unit. The firm’s total costs are C(Q) = 40 + 10Q + 2Q2.

a. How much output should the firm produce in the short run?

[removed]units

b. What price should the firm charge in the short run?

$[removed]

c. What are the firm’s short-run profits?

$[removed]

Solution:

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