What is the effect of an increase in fixed costs

Reference no: EM13201638

Jones Company operates within a monopolistically competitive industry. The estimated demand for its products is given by the following inverse demand function

P = 1760 - 12Q

It finance department has estimated its total cost function as

TC = 24,000 + 5 Q - 15 Q2 + 0.333 Q3

a. What is the level of output that maximizes short run profits?

b. What is the profit maximizing price?

c. What are total profits?

d. What is the effect of an increase in fixed costs of $5000 on equilibrium price and output?

Reference no: EM13201638

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