This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: A monopolist's demand curve is given by: p = 100 + A1/2 Q where Q is the quantity of output and ... (Read 88 times)

joesmith1212

  • Hero Member
  • *****
  • Posts: 549
on: Jul 1, 2018
A monopolist's demand curve is given by:
 
  p = 100 + A1/2  Q
  where Q is the quantity of output and A is the quantity of advertising. Suppose the cost of advertising and output is given by:
   C(Q,A) = 10Q + A
  Determine the profit maximizing quantity of output and advertising.

Question 2

Which of the following cost relationships is not true?
 
  A) AFC = AC - MC
  B) TVC = TC - TFC
  C) The change in TVC/the change in Q = MC
  D) The change in TC/ the change in Q = MC


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

bassamabas

  • Sr. Member
  • ****
  • Posts: 294
Reply #1 on: Jul 1, 2018
Answer to Question 1

The monopolist maximizes profit
Profit = (100 + A1/2  Q)Q  10Q + A
The first order conditions are:
dProfit/dQ = 100  2Q  10 = 0
dProfit/dA = .5A-1/2Q  1 = 0
Solve the first condition to find Q= 45. Use this to solve the second conditions for A = 506.

Answer to Question 2

A


joesmith1212

  • Member
  • Posts: 549
Reply 2 on: Jul 1, 2018
Wow, this really help

LVPMS

  • Member
  • Posts: 323
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

The FDA recognizes 118 routes of administration.

Did you know?

The Centers for Disease Control and Prevention (CDC) was originally known as the Communicable Disease Center, which was formed to fight malaria. It was originally headquartered in Atlanta, Georgia, since the Southern states faced the worst threat from malaria.

Did you know?

Cyanide works by making the human body unable to use oxygen.

Did you know?

Dogs have been used in studies to detect various cancers in human subjects. They have been trained to sniff breath samples from humans that were collected by having them breathe into special tubes. These people included 55 lung cancer patients, 31 breast cancer patients, and 83 cancer-free patients. The dogs detected 54 of the 55 lung cancer patients as having cancer, detected 28 of the 31 breast cancer patients, and gave only three false-positive results (detecting cancer in people who didn't have it).

Did you know?

The most destructive flu epidemic of all times in recorded history occurred in 1918, with approximately 20 million deaths worldwide.

Examining the survivorship curve of a Dall mountain sheep population reveals information on the caus Examining the survivorship curve of a Dall mountain sheep population reveals information on the caus
Growth in the demand for oil from the developing world Growth in the demand for oil from the developing world
An Environmental Kuznets Curve An Environmental Kuznets Curve
Possible Sources of Differences in Output per Worker Possible Sources of Differences in Output per Worker
Inferring Productivity from Data on Output and Factor Accumulation Inferring Productivity from Data on Output and Factor Accumulation
At what speed does Grogzetti need to take the curve to avoid sliding? At what speed does Grogzetti need to take the curve to avoid sliding?
Video: Carbon fixing adaptations Animation

For a complete list of videos, visit our video library