Managerial Economics 2nd Edition by William Boyes

تمرين 13

The demand function is Q = 100 -.5 P. The cost function is TC = C = 100 + 60( Q ) +( Q ) 2
a. Find MR and MC.
b. Demonstrate that profit is maximized at the quantity where MR = MC.
c. Derive the relationship between marginal revenue and the price elasticity of demand, and show that the profit-maximizing price and quantity will never be the unit-elastic point on the demand curve.
d. Using the information in (b), demonstrate that the profit-maximizing price and quantity will never be in the inelastic portion of the demand curve.