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(Steps Shown) One and Only, Inc., is a monopolist. The demand function for its product is estimated to be Q = 60 - 0.4P + 6Y + 2A where Q = quantity of

Question: One and Only, Inc., is a monopolist. The demand function for its product is estimated

to be

Q = 60 - 0.4P + 6Y + 2A

where

Q = quantity of units sold

P = price per unit

Y = per capita disposable personal income (thousands of dollars)

A = hundreds of dollars of advertising expenditures

The firm's average variable cost function is

AVC = Q 2 - 10Q + 60

Y is equal to 3 (thousand) and A is equal to 3 (hundred) for the period being analyzed.

  1. If fixed costs are equal to $1,000, derive the firm's total cost function and marginal cost function.
  2. Derive a total revenue function and marginal revenue function for the firm.
  3. Calculate the profit-maximizing level of price and output for One and Only.
  4. What profit or loss will One and Only earn?
  5. If fixed costs were $1,200, how would your answers change for Parts (a) through (d)?

Price: $2.99
Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document


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