Inverse monthly market demand for tattoos

Assignment Help Business Economics

Reference no: EM13983914

In the town of Inksville, Tats for Tots (i.e., TFT) is the only tattoo parlor dedicated to the under-18 age group. Being a monopolist, TFT hires you to advise it on the best price and quantity of tattoos to sell each month. You estimate the following inverse monthly market demand for tattoos:

P = 1000 - Q,

Where P is the price charged per tattoo and Q is the overall quantity of tattoos produced and sold each month. You also estimate the monthly total cost (TC) for TFT, given by the following:

TC = 20,000 + 200•Q.

Determine the values of P and Q which maximize TFT’s profit. What is TFT’s profit at these optimal values of P and Q?

Reference no: EM13983914

Questions Cloud

Costs and values in a society affected by externalities : Describe the relationship between costs and values in a society affected by externalities. Discuss the options that people and governments have to take account for their actions in these markets. Include comments regarding equilibrium and welfare dyn..

Compare and contrast the four market structures : Compare and contrast the four market structures. Include comments in regards to price setting for profit maximizing, origination of the market structure, and government responses and/or involvements in each type of market structure.

Inter temporal budget constraint : Thomas has income of $1500 today and $1000 tomorrow. He can lend and borrow at an interest rate of 10%. There is 10% inhalation. His preferences for inter temporal consumption are represented by the following utility function U (c1 ; c2 ) = c1 + c2 ...

Political philosophies associated with income inequalities : Discuss tax systems and political philosophies associated with income inequalities. List and describe the relationship between the two tax principles and three tax systems discussed in this course. Include comments regarding the effects of tax on soc..

Inverse monthly market demand for tattoos : In the town of Inksville, Tats for Tots (i.e., TFT) is the only tattoo parlor dedicated to the under-18 age group. Being a monopolist, TFT hires you to advise it on the best price and quantity of tattoos to sell each month. Determine the values of P ..

How much will this firm want to sell to each consumer type : The Errata Book Company is a firm that sells its book to two types of consumers, type 1 and type 2. The marginal revenue Errata gets from type 1 consumers is: MR1 = 20 - 2Q1, and the marginal revenue Errata gets from type 2 consumers is: MR2 = 15 - 3..

The level of aggregate real income decreases : Monetary Policy Each of the following events will have one of the effects given below. Identify the correct effect by letter. Some answers may be used more than once and some may never be used. The level of aggregate real income (real GDP) decreases...

Appropriate horizontal- and vertical-axis intercepts : The market for lemonade in a town consists of two lemonade stands (i.e., firms), 1 and 2. An agricultural economist estimates the following demand for lemonade in this town: Q = 300 - P, where Q is the market quantity and P is the market price. find ..

Policies redistributes income across generations : Explain how each of the following policies redistributes income across generations. Is the redistribution from young to old, or from old to young? a. an increase in the budget deficit b. more generous subsidies for education loans c. greater investme..

User Account

All Pages