Reference no: EM131228762
1. The Madison Corporation, a monopolist, receives a report from a consulting firm Concluding that the demand function for its product is:
Q=78- l.l P+ 2.3 Y+ 0.9A
Where Q is the number of units sold, P is the price of the product (in dollars), Y is Income per capita (in thousands of dollars), and A is the firm's advertising expenditure (In thousands of dollars). The firm's average variable cost function is:
AVC= 42 -8 Q + 1.5 Q2
Where AVC is average variable cost (in dollars)
A. What is the firm's Marginal Cost function?
B. What is the firm's Marginal Revenue function?
C. If per capita income is $4,000 and advertising expenditure is $200,000 what is the optimal price and output for Madison?
2. Country A can produce, at most, 40 olives or 20 pickles, or some combination of olives and pickles such as the 20 olives and 10 pickles it is currently producing. Country B can pro ...there is more show problem Chapter 21 #2
Country A can produce, at most, 40 olives or 20 pickles, or some combination of olives and pickles such as the 20 olives and 10 pickles it is currently producing. Country B can produce, at most, 120 olives or 60 pickles, or some combination of olives and pickles such as 100 olives and 50 pickles it is currently producing.
Is there a basis for trade?
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