Question

AB has used market research to determine that if a price of $250 is charged for...

AB has used market research to determine that if a price of $250 is charged for product G, demand will be 12000 units. It has also been established that demand will rise or fall by 5 units for every $1 fall/rise in the selling price. The marginal cost of product G is $80.

Required: If marginal revenue = a – 2bx when the selling price (P) = a – bx, calculate the profit-maximising selling price for product G

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Apple has an activity tracking app. The market demand for the app is given by P...
Apple has an activity tracking app. The market demand for the app is given by P = 124 - 0.1Q. The marginal cost of producing the app is MC = 1 + 0.1Q. Apple's profit-maximizing output is _________ units and their profit-maximizing price is $__________.    Once Apple's patent expires and more competitors enter the market, total output in the market will rise to ______ units and the market price will fall to $_________.
2) Product price (p) and demand (D) are typically related linearly. Company A has performed extensive...
2) Product price (p) and demand (D) are typically related linearly. Company A has performed extensive market research to develop a better relationship. They determined that the selling price of a product, p, is related to the demand for their product, D, in accordance with the following improved relationship P= 92.5 – 0.09 (D^1.1) (in dollars) Demand is given in units per year. In addition, there is a fixed cost of $40,000 per year and a variable cost of $40...
A perfectly competitive market does not imply which of the following? a. The firm’s price will...
A perfectly competitive market does not imply which of the following? a. The firm’s price will be greater than marginal revenue. b. The market price is established at the point where supply equals demand. c. Production is carried out only until supply equals demand. d. Marginal benefit equals marginal cost. Which of the following is not a point where firms produce in long-run equilibrium? a. The minimum average variable cost is below selling price. b. Marginal cost equals marginal revenue....
Profit equals revenue minus cost. Let us assume that firm S is a price taker. (a)...
Profit equals revenue minus cost. Let us assume that firm S is a price taker. (a) In other words it faces a (i) horizontal (ii) demand curve Let us assume that it faces a market price of £2 per unit for its product. (b) What is its total revenue from selling: (i) 5 units? 10 (ii) 8 units? 16 (c) What shape is its total revenue curve? (d) What will be its marginal revenue from selling: (i) the fifth unit?...
Consider a profit-maximizing firm which is the only seller in a particular market. The firm’s marketing...
Consider a profit-maximizing firm which is the only seller in a particular market. The firm’s marketing research department has estimated the demand for, and the marginal revenue from your firm’s product is described by the following equations: P = 100 – 0.01Q and MR = 100 – 0.02Q. Consider that the firm’s cost structure is described by the following equations: MC = 40 + 0.02Q and AVC = 40 + 0.01Q. Furthermore, the firm’s only fixed cost is the $24000...
2. Options, risk, and the option premium. The current market price of a large corporation’s stock...
2. Options, risk, and the option premium. The current market price of a large corporation’s stock is $255. You purchase the stock for this price. After one month, there is a 80% chance that price will rise to $260 and a 20% chance it will fall to $240. a. What is the expected return and standard deviation of the returns on buying one share of this stock (returns = selling price – purchase price)? b. Suppose you held a one-month...
1. Because a perfectly competitive firm will not charge more or less than the market price,...
1. Because a perfectly competitive firm will not charge more or less than the market price, that firm’s demand curve is ______. a.upward sloping b.vertical c.horizontal d.downward sloping 2. In a perfectly competitive market, a firm's price is determined by the _____. a.average total cost b.market supply and demand c.individual firm's marginal costs d.owner's decision 3.______ revenue is the revenue that the firm receives from the sale of all of its products. a.Marginal b.Total c.Average d.Percentage 4. ______ revenue equals...
The marketing research department of a computer company used a large city to test market the...
The marketing research department of a computer company used a large city to test market the firm’s new laptop. The department found that the relationship between price p (dollars per unit) and the demand x (units per week) was given approximately by p=1,296-0.12x^2 0≤x≤80) So, weekly revenue can be approximated by R(x)=xp=1,296x-0.12x^3 Find all critical numbers of the function, then use the second-derivative test on each critical number to determine if it is a local maximum or minimum in order...
A. If Glass Inc. produces 80 window panes per day at the market price of $60...
A. If Glass Inc. produces 80 window panes per day at the market price of $60 in a perfectly competitive market, what would happen to price if Glass Inc. increases production to 120 window panes, all else equal? The price would decrease as production by Glass Inc. rises. The price would fluctuate in an unknown pattern. The price would remain the same. The price would increase as production by Glass Inc. rises. 1. If the total variable cost of producing...
4.Which statement isincorrect? a.A pure monopolist’s demand curve is the market demand curve. b.A monopoly produces...
4.Which statement isincorrect? a.A pure monopolist’s demand curve is the market demand curve. b.A monopoly produces a product for which there are no close substitutes. c.Marginal revenue is less than price for a monopolist that cannot price discriminate. d.A monopolist’s market position ensures positive economic profits. 5.For a firm with monopoly power that cannot engage in price discrimination: a.the marginal revenue curve lies below the demand curve because any reduction in price applies only to the last unit sold. b.the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT