Determine the profit-maximizing output

Reference no: EM133487189

Case: Consider the cost function:

TC(Q) = 1000 + 4Q2

for RussCo to produce its new Phone. Using that cost function for the Phone, determine the profit-maximizing output, price and profit for the RussCo Phone, and discuss its long-run implications, under three alternative scenarios:

Question 1: RussCo Phone is a perfect substitute with a similar product offered by Apple, Samsung and several other Phones that have similar cost functions and that currently sell for $800 each.

You must show your work. Keep in mind that in this example, the firm can make a profit since the market has dictated a price.

Question 2: RussCo Phone currently has no substitutes, and currently the demand for the RussCo Phone is Q = 108 - (1/5)P, but RussCo anticipates other firms can develop close substitutes in the future. - note you use the cost function (TC(Q) = 1000 + 4Q2).

Question 3: RussCo Phone has no substitutes and so is a monopolist, and the demand for the RussCo Phone is expected to forever be Q = 36 - (1/5)P - note you use the cost function (TC(Q) = 1000 + 4Q2).

You must show your work. If a firm loses money, why would it consider remaining open (remember fixed costs)

Reference no: EM133487189

Questions Cloud

Influence dynamics of the relationship : Describe at least situations where partners might experience different sexual needs or expectations and how this might influence dynamics of the relationship

Identify one market or sector in the australian construction : Identify one market or sector in the Australian construction industry that exemplifies that market structure

Identify a social problem then propose and justify solution : Identify a social problem then Propose and justify a solution for the problem that is promotes something God values according to the scripture.

Identify a single major achievement in epidemiology : Briefly identify one source of public health data on that issue. Finally, incorporating the concepts of risk and rates, briefly discuss at least one major

Determine the profit-maximizing output : Determine the profit-maximizing output, price and profit for the RussCo Phone, and discuss its long-run implications, under three alternative

Provide some insight into how well you can function : The tasks you will complete during psychological evaluations are intended to provide some insight into how well you can function.

Review the career planner guide : Review the Career Planner Guide. This document contains the requirements for the Assignment as well as resources to consult. Seek out other resources

Describe the four types of bullying behavior : Define bullying, then describe the four types of bullying behavior and provide examples of each type.

Calculate the price elasticity of demand : Calculate the price elasticity of demand E. At this point on the demand for X, is demand elastic, inelastic, or unitary elastic? How would increasing the price

User Account

All Pages