Your marketing research department has estimated the demand for your firm's product to be Q=10,000−100P and...

Your marketing research department has estimated the demand for your firm's product to be Q=10,000−100P and the marginal revenue to be R=100−0.02Q. Suppose marginal cost and average total cost are constant at $60. What is the quantity that you should produce? ________ units.

Expert Solution

the firm produces at MR=MC to maximize profit

equating both equations

100-0.02Q=60

0.02Q=40

Q=2000

You should produce 2000 units

Rahul Sunny answered 2 years ago

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