Question: Suppose the demand for the clock-radio firm’s output is represented by the equation P=100-1.5Q where P is price in dollars and cents and Q is quantity demanded per time period.

a. Derive the function for the firm's marginal revenue.

b. Using the marginal cost function you generated for the firm in the previous problem, calculate the profit-maximizing output level for the firm (assume that it cannot price discriminate).

c. Calculate the firm’s profit.

d. Explain why the output and profit level you just calculated are not considered long run equilibria.

Suppose the firm was now able to engage in first-degree price discrimination.

e. Explain why the firm’s demand curve would now be its marginal revenue curve.

f. What would be the firm's profit maximizing output?

g. Calculate the firm's profit.