Has a registered trademark

Assignment Help Business Economics
Reference no: EM138891

Q. A firm has developed a new product for which it has a registered trademark. The firm's market research department has estimated that the demand for this product is Q(P,A) = 11,600 - 1000P + 20A^1/2, where Q is annual output, P is the price, and A the annual expenditure for advertising. The total cost of producing the new good is C(Q) = .001Q^2 + 4Q. This implies that the marginal cost of production is MC (Q) = .002Q + 4. The unit cost of advertising is constant and equal to one or T=1.

a. Find the inverse demand function P(Q,A), and show that the marginal revenue from an additional dollar of advertising is MR a = QA^-1/2 / 100

b. calculate the optimal output level Q* price P* and advertising level A* for the firm

c. What is firm profit if it follows this optimal strategy?

d. What is consumer surplus if the firm adopts this strategy?

Reference no: EM138891

Questions Cloud

Equilibrium of such a monopolistic firm : Illustrate graphically the equilibrium of such a monopolistic firm.
Price elasticity of demand and price elasticity of supply : Price Elasticity of Demand and Price Elasticity of Supply at the equilibrium point.
Piece of commercial real estate : Then you inherited a piece of commercial real estate bringing in $12,000 in rent annually.
Equilibrium level of output in this economy : what is the short run equilibrium level of output in this economy.
Has a registered trademark : A firm has developed a new product for which it has a registered trademark.
Collude to produce the monopoly output : What is the output of each firm if they collude to produce the monopoly output. What profit does each firm earn with such collusion.
Result of deaths from secondhand smoke : How much output is lost as a result of deaths from secondhand smoke, according to the news.

Reviews

Write a Review

Business Economics Questions & Answers

  Demand curve is much more inelastic

If the demand curve is much more inelastic than the supply curve, clarify whether buyers or sellers will shoulder more of the tax burden from a new tax placed on the sellers.

  5 ways to develop strategic business

5 ways to develop strategic business and briefly discuss differentiate, customer-oriented, understand clients need, r-s platform and management, active marketing, etc

  Hiro nakamura is ceo of the cola king bottling company

Hiro Nakamura is CEO of the Cola King Bottling Company, a small regional producer operating in the Pacific Northwest. Nakamura is considering two alternative expansion proposals

  Current antipoverty policy

You are asked whether current antipoverty policy meets three generally accepted goals of helping, minimizing cost, preserving work incentives also what changes you would favor and why.

  Maintain a claim for sexual harassment

Explain what Alice must prove in order to maintain a claim for sexual harassment and constructive discharge.

  Tit-for-tat strategy

Illustrate the way in which market forces shape the organizational responses using a range of examples.

  Consumer at an optimum

What is the MRS Is this consumer at an optimum. If not at an optimum should the consumer buy more of the X good or more of the Y good.

  Goals of the owners

Elucidate that contract align the incentives of the new vice president with the goals of the owners.

  Laborers with experience in home construction moves

A wave of day laborers with experience in home construction moves into the area. Will this shift the labor supply curve, demand curve or both in home construction.

  Electric power industry

The electric power industry is held up in the article as an example of a natural monopoly. Brainstorm other examples that can be readily identified in the present market economy.

  Gradual increase in the percentage of fathers

How would a gradual increase in the percentage of fathers who stay home to care for young children while their wives continue working.

  Relationship between the farms output and total costs

Assume that during the last month of the tenth year of ownership, the property in Problem 2 is sold for 1,500,000. Assume also that the seller incurs transaction costs equalling 6 % of the sales price.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd