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4. You are the manager of a firm with total cost given by TC = 5,000...

4. You are the manager of a firm with total cost given by

TC = 5,000 + 100Q

where Q denotes quantity. The demand for the firm is determined by

Q = 800 – 4P

where P denotes price.

4. (a) What is the maximum revenue for your firm?

(b) What is the price elasticity of demand at the price and quantity that maximize revenue? Justify your answer.

(c) What is the maximum profit for your firm?

4. You are the manager of a firm with total cost given by

TC = 35,000 + 100Q

where Q denotes the number of units produced by the firm. The market price is determined by

P = 700 – Q

4. (d)  What is the price elasticity of demand at the price and quantity that maximize profit? Justify your answer.

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