1. Suppose the demand for baseballs is given by Q = 200 - 8P.
a. waht is the price elasticity of demand when P=6?
b. at what price will total revenue be maximized?
c. what is the firm's marginal revenue when the price is $10?
2. Suppose there are n identical firms in a market. each firm's cost function is given by C= 240+14q^2, where q is the amount that an individual firm produces. this means that an individual firm's marginal cost is given by MC = 30q. Also, the market demand is given by P = 504 - 8Q, where Q is the total amount of the good produced by all of the firms combined. therefore, Q= n*q.
a. how much output will each of them produce?
b. what will be the market price?
c. how many firms will there be in long run equilibrium?