Suppose the demand (in thousands) for a toaster is given by 100p−2, where p is the...

Suppose the demand (in thousands) for a toaster is given by 100p−2, where p is the price in dollars charged for the toaster. a. If the variable cost of producing a toaster is $10, what price maximizes profit? Consider prices from $12 to $30, at $2 increments.

Solutions

Expert Solution

P	Q	VC	TR=P*Q	Profit = TR-VC
12	1198	11980	14376	2396
14	1398	13980	19572	5592
16	1598	15980	25568	9588
18	1798	17980	32364	14384
20	1998	19980	39960	19980
22	2198	21980	48356	26376
24	2398	23980	57552	33572
26	2598	25980	67548	41568
28	2798	27980	78344	50364
30	2998	29980	89940	59960

From the above table we can observe that the profit is maximum at P = $ 30 , So, $30 maximises the profit

Rahul Sunny answered 1 year ago

Next > < Previous

Related Solutions

Suppose that the demand curve for pizzas (in thousands per day) is given by P =...

Suppose that the demand curve for pizzas (in thousands per day) is given by P = 12 – 0.5Q. Calculate the price elasticity of demand if the price is equal to $6. Give and explain one factor that could cause the elasticity of demand for pizzas to increase.

Suppose the demand for lychees is given by the following equation:Qd = 4000 –100P + 500PM...

Suppose the demand for lychees is given by the following equation:Qd = 4000 –100P + 500PM ,where P is the price of lychees and PM is the price of mangoes. a) What happens to the demand for lychees when the price of mangoes goes up? Are lychees and mangoes substitutes or complements? b) Graph the demand curve for lychees when PM= 2.Now suppose that the quantity of lychees supplied is given by the following equation:Qs = 1500P –60R ,where R...

Suppose that the demand for bananas is given by: Qd(p) = 1,500,000 – 50000p where Qd(p)...

Suppose that the demand for bananas is given by: Qd(p) = 1,500,000 – 50000p where Qd(p) is quantity demanded in kilograms of bananas and p is the price. Further suppose that there are many identical sellers in the domestic market who can each choose to plant bananas. If a seller chooses to produce bananas, she will incur a planting cost of $2.00 per kilogram at the beginning of the year and must pay an additional $0.50 per kilogram to harvest...

Suppose the demand curve in a city is given by P = 100 - 2Q, where...

Suppose the demand curve in a city is given by P = 100 - 2Q, where P denotes price and Q the local GDP. The supply curve is given by P = 10 + Q. Now Suppose that due to an initial impulse of ΔX = 10 (Increase in exports) and further induced increases in local incomes the new induced demand curve changes to P = 150 - 2Q. Where are the local GDP and the corresponding income multiplier if...

The consumer demand equation for tissues is given by q = (100 − p)2, where p...

The consumer demand equation for tissues is given by q = (100 − p)2, where p is the price per case of tissues and q is the demand in weekly sales. (a) Determine the price elasticity of demand E when the price is set at $34. (Round your answer to three decimal places.) E = Interpret your answer. The demand is going ? up down by % per 1% increase in price at that price level. (b) At what price should tissues...

Suppose the demand function for a given product is q = 5,400 - 2p2, where p...

Suppose the demand function for a given product is q = 5,400 - 2p2, where p is the price in dollars. Find the price interval(s) where demand is elastic: Find the price interval(s) where demand is inelastic: show work

The demand for gizmos is given by Q=2,000-100P and the supply of gizmos is given by...

The demand for gizmos is given by Q=2,000-100P and the supply of gizmos is given by Q=-100 + 200P. There is a $2/unit sales tax on gizmos. Who pays the tax? Who bears the economic burden of the tax? On a supply and demand graph, label the price that buyers pay, the price sellers receive, the tax incidence borne by buyers and sellers, and the deadweight loss associated with the tax.

Suppose that consumer (retail) demand for a product is given by: Q=100−P, where Q is the...

Suppose that consumer (retail) demand for a product is given by: Q=100−P, where Q is the quantity demanded and P is the price. The inverse demand curve (which gives the price as a function of the quantity demanded) is: P=100−Q. The marginal cost of production and average total cost of production are $26 per unit, and the marginal cost of distribution and average total cost of distribution are $10 per unit. Suppose the retail distribution is monopolized by another firm....

2. Suppose the demand function for a monopolist’s product is given by P = 300 –...

2. Suppose the demand function for a monopolist’s product is given by P = 300 – 3Q and the cost function is given by C = 1500 + 2Q2 (Kindly answer clearly) A) Calculate the MC. B) Calculate the MR. C) Determine the profit-maximizing price. D) Determine the profit-maximizing quantity. E) How much profit will the monopolist make? F) What is the value of the consumer surplus under monopoly? G) What is the value of the deadweight loss?

suppose the demand curve for product Y is given by P=150+2i-(Q/2), where i is income measured...

suppose the demand curve for product Y is given by P=150+2i-(Q/2), where i is income measured in thousands of dollars, P is price of product Y in $, Q is quantity of product Y. The supply curve is Q=3P+50, if i=25. 1.What is the price elasticity of demand for product Y at the equilibrium? 2.What is the income elasticity of demand for product Y?

Subjects