.. Consider the following demand and cost information for a monopoly. Find profit-maximizing price and quantity. Finally, find the…

.. Consider the following demand and cost information for a monopoly. Find profit-maximizing price and quantity. Finally, find the…

Question:

Don't use plagiarized sources. Get Your Custom Assignment on
.. Consider the following demand and cost information for a monopoly. Find profit-maximizing price and quantity. Finally, find the…
From as Little as $13/Page

  

Transcribed Image Text:

.. Consider the following demand and cost information for a monopoly. Find profit-maximizing
price and quantity. Finally, find the maximal profit. (You’ll need to find the firm’s TR, MR, and
MC for each level of quantity.)
Quantity
0
1
2
3
4
Price
$30
$25
$20
$15
$10
Total Cost
$3
$7
$12
$18
$25 Your chief economist estimates the log-log demand curve Q=23-0.7*In(P) +0.5*In(A),
where P is the price of your product and A is the dollar amount spent on advertising. You recall
your economics class from Winthrop and how coefficients of a log-log regression represent
elasticities: 0.7 is the price elasticity of demand (PED), and 0.5 is the advertising elasticity of
demand (AED). If your firm’s total revenue is $100,000, using all this information, find how
much money you should set aside for advertising purposes for your product. What percentage of
your total revenues is that amount?
s/Q
212
136
120
110
104
96
60
700 810 884
MR
MC
ATC
976 1,000
Q/t
Observe the graphical representation of the monopoly firm above. Please find this firm’s TR.
TC and profit at the firm’s optimal output level.

Expert Answer: