Find the profit maximizing output and price

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Reference no: EM13221366

Suppose Gatorhaus is a monopoly on all SFSU monogrammed items. The inversedemand curve the store faces is given by P=270-Q and its cost function is C(Q)=4Q2+100.

a) Write down the revenue function for Gatorhaus and find the Marginal Revenue.

b) Find its marginal cost.

c) Find the profit maximizing output and price.

d) Suppose the store's loading dock faces the entrance of a campus building and the discarded boxes and paper (till they are cleaned out at a particular time of the day) generates a negative externality on the students. The marginal cost due to externality is MCE= 2Q. Find the socially optimal output.

e) Suggest a policy/strategy that could induce the store to produce the socially efficient output.

Reference no: EM13221366

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