The market structure of the local boat industry is best characterized by monopolistic competition. Homer's Boat Manufacturing is one of the producers in the local market. The demand for Homer's Boats is:
Q^d = 5000 - P $\iff$ P = 5000 - Q^d.
The resulting marginal revenue curve is
MR(Q^d) = 5000 - 2 Q^d.
Homer's cost function is:
C(Q) = 3 Q² $\implies$ MC(Q) = 6Q.
Determine Homer's profit maximizing level of output and the price charged to customers. Is this a long-run equilibrium?

Question

The market structure of the local boat industry is best characterized by monopolistic competition. Homer's Boat Manufacturing is one of the producers in the local market. The demand for Homer's Boats is:
Q^d = 5000 - P

\iff

P = 5000 - Q^d.
The resulting marginal revenue curve is
MR(Q^d) = 5000 - 2 Q^d.
Homer's cost function is:
C(Q) = 3 Q²

\implies

MC(Q) = 6Q.
Determine Homer's profit maximizing level of output and the price charged to customers. Is this a long-run equilibrium?

Quizplus · Accepted Answer

The Answer of The market structure of the local boat industry is best characterized by monopolistic competition. Homer's Boat Manufacturing is one of the producers in the local market. The demand for Homer's Boats is: Q^d = 5000 - P $\iff$P = 5000 - Q^d. The resulting marginal revenue curve is MR(Q^d) = 5000 - 2 Q^d. Homer's cost function is: C(Q) = 3 Q² $\implies$ MC(Q) = 6Q. Determine Homer's profit maximizing level of output and the price charged to customers. Is this a long-run equilibrium?

The Market Structure of the Local Boat Industry Is Best ⟺ \iff⟺

The Market Structure of the Local Boat Industry Is Best $\iff$