Suppose you are the manager of Alpha Enterprises, a firm that holds a patent that makes it the exclusive manufacturer of bubble memory chips. Based on the estimates provided by a consultant, you know that the relevant demand and cost functions for bubble memory chips are Q = 25 - 0.5P; C = 50 + 2Q.
(a) What is the firm's inverse demand function? (Explain the demand function)
(b) What is the firm's marginal revenue when producing four units of output? (Explain the marginal revenue from the formula and get the MR for 4 Units)
(c) What are the levels of output and price when you are maximizing profits? (Explain how to maximize the profit)
(d) What will be the level of your profits? (Explain why the level will be such)