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What is the firms profit-maximizing quantity

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The demand function for a firm’s product is Q = P-3. The firm’s marginal cost of production is constant at MC(Q) = 12. (a) Calculate the elasticity of demand, as a function of Q. (b) Does the firm’s profit maximization problem satisfy the global SOC? (c) Using your answers to (a) and (b), what is the firm’s profit-maximizing markup? (Justify your answer carefully. Do not forget about the possibility of a boundary solution.) (d) Based on your answer to (c), what is the firm’s profit-maximizing price? (e) Based on your answer to (d), what is the firm’s profit-maximizing quantity?

Reference no: EM13896618

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