Refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
$Q _ { d } = 800,000 - 2,000 P + 0.7 M + 4,000 P _ { R }$
$A V C = 500 - 0.03 Q + 0.000001 Q ^ { 2 }$
where
$Q _ { d }$ is the quantity demanded, P is price, M is income, and
$P _ { R }$ is the price of a related good. The firm expects income to be $40,000 and
$P _ { R }$ to be $53. Total fixed cost is $2,600,000.
-What price should the firm charge in order to maximize profit?

Question

Refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
 $Q _ { d } = 800,000 - 2,000 P + 0.7 M + 4,000 P _ { R }$ 
 $A V C = 500 - 0.03 Q + 0.000001 Q ^ { 2 }$ 
where
 $Q _ { d }$ is the quantity demanded, P is price, M is income, and
 $P _ { R }$ is the price of a related good. The firm expects income to be $40,000 and
 $P _ { R }$ to be $53. Total fixed cost is $2,600,000.
-What price should the firm charge in order to maximize profit?

Quizplus · Accepted Answer

The Answer of Refer to the following:
A price-setting firm faces the following estimated demand and average variable cost functions:
 $Q _ { d } = 800,000 - 2,000 P + 0.7 M + 4,000 P _ { R }$ 
 $A V C = 500 - 0.03 Q + 0.000001 Q ^ { 2 }$ 
where
 $Q _ { d }$ is the quantity demanded, P is price, M is income, and
 $P _ { R }$ is the price of a related good. The firm expects income to be $40,000 and
 $P _ { R }$ to be $53. Total fixed cost is $2,600,000.
-What price should the firm charge in order to maximize profit?

Refer to the Following: a Price-Setting Firm Faces the Following Qd=800,000−2,000P+0.7M+4,000PRQ _ { d } = 800,000 - 2,000 P + 0.7 M + 4,000 P _ { R }Qd​=800,000−2,000P+0.7M+4,000PR​

Refer to the Following:
a Price-Setting Firm Faces the Following $Q _ { d } = 800,000 - 2,000 P + 0.7 M + 4,000 P _ { R }$