Refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
where
is the quantity demanded, P is price, M is income, and
is the price of a related good. The firm expects income to be $40,000 and
to be $53. Total fixed cost is $2,600,000.
-What is the estimated demand function for the firm?
A) = 1,040,000-2,000P
B) = 800,000 - 4,000P
C) = 800,000- 500P
D) = 1,600,000- 2,000P
Correct Answer:
Verified
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