Find the bar short run profit

Reference no: EM133219401

Question - Suppose a bar in a remote mining town is the only bar within one hundred kilometres and so is a monopoly. The bar has a short run cost function C(Q) = 80 + 4Q and the market demand for its drinks is Q = 400 - 40p where Q is the number of drinks and p is the price of a drink.

A. Find the bar's short run profit.

B. The bar comes up with an idea to have a cover charge of $A per person to enter the bar. There are twenty identical customers that make up the market demand Q = 400 - 40p. Find the amount of the cover charge A per person and the price per drink p the bar should set in order to maximize profits.

Reference no: EM133219401

Questions Cloud

How much inflation occurred : Calculate a price index for 2011, 2012, and 2013 using the following information about prices. How much inflation occurred between 2011 and 2012

How a country saving can be applied to fund domestic : Explain how a country's saving (private and public) can be applied to fund domestic and/or foreign investment

Derive and explain the kind of budget implemented : Derive and explain the kind of budget implemented by the UK government and by how much if actual output generated is £5.0 trillion (show all workings)

Draw the reaction functions for both firms : Draw the reaction functions for both firms. (Be sure to label which is which and indicate the value of the reaction functions where they cross the axes)

Find the bar short run profit : The bar has a short run cost function C(Q) = 80 + 4Q and the market demand for its drinks is Q = 400 - 40p. Find the bar short run profit

Explain how automatic stabilizers work in Canadian economy : Explain how automatic stabilizers work in Canadian economy. What are the options with government with an inflationary gap caused by demand-pull inflation

Find market-clearing real wage rate and level of employment : Suppose the marginal product of labor in the economy is given by MPN = 0.01(3,000 - N), Find the market-clearing real wage rate and level of employment

Show the equilibrium outcome of the wage-setting : Show the equilibrium outcome of the wage-setting, price-setting model of the labor market and provide economic intuition for the model

Determine the effects of this action on Canada GDP : Kenney believes that Alberta, with its vast oil reserves, can fill the void from the Russia oil embargo. Determine the effects of this action on Canada GDP

User Account

All Pages