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Where q is weekly production and p is price measured in

A firm faces the following average revenue (demand)

curve: P = 120- 0.02Q

where Q is weekly production and P is price, measured in cents per unit. The firm"s cost function is given by C = 60Q + 25,000.Assume that the firm maximizes profits.

a. What is the level of production, price, and total profit per week?

b. If the government decides to levy a tax of 14 cents per unit on this product, what will be the new level of production, price, and profit?

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Solution Preview :

Prepared by a verified Expert

Microeconomics: Where q is weekly production and p is price measured in

Reference No:- TGS0660363

Have a Question? (oR Write a Review)

Recent Questions Asked Microeconomics

Q : Why is there a social cost to monopoly power if the gains

Q : Why will a monopolists output increase if the government

Q : Why is there a social cost to monopsony power if the gains

Q : Will an increase in the demand for a monopolists product

Q : Where q is weekly production and p is price measured in

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Solution Preview :

Prepared by a verified Expert

Microeconomics: Where q is weekly production and p is price measured in

Reference No:- TGS0660363

Recent Questions Asked Microeconomics

Q : Why is there a social cost to monopoly power if the gains

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