Profit maximizing

Here is a problem that I'm trying to solve: No reaction will result in the monthly demand and marginal revenue functions: P = $150-$0.1Q MR = $150-$0.2Q A major reaction will lead to the more elastic curves: P = $130-$0.4Q MR = $130-$0.8Q The total monthly cost for marketing this product is composed of $3000 additional administrative expenses and $50 per unit for production and distribution costs. The relevant total cos and marginal cost are: TC = $3000+$50Q MC = $50 a.) what is the profit-maximizing price, assuming not competitor reaction? b.) calculate this price based on the assumption competitors will react. c.) in light of cost conditions and absent any sub... click for more

Optimal price/output and economic profits

(Demand) P=$85Q-$0.2Q (Marginal Reveune) MR=$85-$0.4Q (Total Cost) TC=$900+$20Q+$0.8Q2 (Marginal Cost) MC=$20+$1.6Q where P is price (in dollars), Q is output (in thousands of megawatt hours) and TC is total cost (in thousands of dollars). a) if the firm were operating as a pure monopolist, what would be its optimal price/output solution and level of economic profits? The way I worked it out: MR = MC $85-0.4Q = $20+1.6 65 = 2.0Q 32.5 = Q P = 85Q-0.2Q2 = 85(32.5)-0.2(32.5)2 = 276.25-0.2(1056.25) = 276.25-211.25 = $65.00 Could someone look over this to make sure that I am right.

Industry output and market share

Here is a problem that I am trying to figure out: Wkly. output Apple Airlines(A) Big Bird(B) Chancy Airlines, ltd.(C) 1 $40 $20 $50 2 30 25 40 3 25 30 45 4 35 35 55 5 50 40 65 6 60 50 75 The current fare market price of $45 can't be raised. Thus P=MR=$45 I have to a) calculate current... click for more

Point price elasticity of demand/optimal markup

Here is the problem: Last week, Archie Bunker's offered a 25 cent coupon on 12-packs of Diet Cola, regularly priced at $4. Coupons were used on 40% of all purchases, and resulted in an increase from 400 to 490 cases sold per week. I know that to find Ep = % change in qty / % change in price, and the equation for optimal markup is -1/Ep + 1 = Q2-Q1/P2-P1, but I am not sure how to plug in the numbers to answer the following questions. a. using the regular $4 price, calculate the point price elasticicty of demand for Diet Cola. b. calculate the optimal markup on cost for Diet Cola. c. If MC per unit is $3 plus 20 cent in handling costs, calculate the profit maximizing price on Di... click for more

HSAs - demand and supply slide contol mechanisms?

Do HSA's encompass demand side cost control mechanism? Do Hsa's include supply side cost control mechanisms? What is the Impact on future costs