Dr Williams a famous Plastic Surgeon has a status for being one of the finest surgeons for reconstructive nose surgery. Dr Williams enjoys a quite substantial degree of the market power in this market. She has expected demand for her work to be:
Q = 480 – 0.2P
Where Q is the number of nose operations operated monthly and P is the price of nose operation.
Q1. Find out the inverse demand function for Dr. William’s service?
Q2. Determine the marginal revenue function?
The average variable cost function for the reconstructive surgery is anticipated to be:
AVC = 2Q - 15Q + 400
Where AVC is the average variable cost (measured in dollars) and Q is the number of operations per month. Doctor’s fixed costs each month are $8,000.
Q3. If the Doctor wants to maximize her profit, how many nose operations must she perform each month?
Q4. What price must Dr Williams charge to perform a nose operation?
Q5. How much profit does she earn in each month?