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In: Economics

Suppose that your marketing research department has found that the consumer​ (retail) demand for your product​...

Suppose that your marketing research department has found that the consumer​ (retail) demand for your product​ is:

Q=140−P​,

where Q is the quantity demanded and P is the price. This demand function can be solved for the inverse

demand–that ​is, the price as a function of the quantity​ demanded:

P=140−Q.

Your marginal cost of production and average total cost of production are constant and equal to ​$75 per unit. The marginal cost of distribution and average total cost of distribution are also constant and equal to $15 per unit.

If you produce and distribute the​ product, your​ profit-maximizing price will be__?

​and your​ profit-maximizing output will be__units.

The amount of economic profit you make is__?

If the distributors of your product are perfectly​ competitive, your​ profit-maximizing wholesale price will be__?

and your​ profit-maximizing wholesale output will be__units?

Your economic profit will be__?

The retail price for your product will be__?

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Expert Solution

Rahul Sunny answered 1 year ago
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