Inverse monthly market demand for tattoos

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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

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