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The smith company, run by 4 partners in a noncompetitive market, produces a particular type of widget in a single manufacturing facility. The demand curve for its product is
P = 4,000 – (1/2) q
and its total cost function is
C = 1,000,000 + 2,000 q
where P is price (in dollars), C is total cost (in dollars), and q is monthly output. MC = 2,000.
Find the MR function for the Company.
Partner Number 1 wants to bring in as much revenue as possible. What price and quantity will he recommend?What is the firm’s profit?
Partner Number 2 also wants to bring in as much revenue as possible but believes that there is a monthly maximum production capacity of 3,800 widgets. What price and quantity will he recommend? What is the firm’s profit?
Partner Number 3 wants to bring in as much profit as possible. What price and quantity will she recommend? What is the firm’s profit?
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