The market demand for a monopoly firm is estimated to be:
Qd= 100,000 − 500P + 2M +
5,000PR
where Qd is quantity demanded,
P is price, M is income, and
PR is the price of a related good. The
manager has forecasted the values of M and
PR will be $50,000 and $20,
respectively, in 2021. The average variable cost function is
estimated to be
AVC = 520 − 0.03Q +
0.000001Q2
Total fixed cost in 2021 is expected...