What price should she charge to perform a nose operation

Assignment Help Econometrics

Reference no: EM13242162

Dr. Leona Williams, a well-known plastic surgeon, has a reputation for being one of the best surgeons for reconstructive nose surgery. Dr. Williams enjoys a rather substantial degree of market power in this market. She has estimated demand for her work to be
Q=480-0.2P,
where Q is the number of nose operations performed monthly and P is the price of a nose operation.

a. What is the inverse demand function for Dr. William's services?
b. What is the marginal revenue function?

The average variable cost function for reconstructive nose surgery is estimated to be

AVC=2Q (squared) - 15Q + 400,
where AVC is average variable cost (measured in dollars), and Q is the number of operations per month. The doctor's fixed costs each month at $8,000.

c. If the doctor wishes to maximize her profit, how many nose operations should she perform each month.

d. what price should she charge to perform a nose operation?

e. how much profit does she earn each month?

Reference no: EM13242162

Questions Cloud

Discuss concepts of price transparency and information : Discuss the concepts of price transparency and information asymmetry and they apply to the diamond industry as a result of the entry of BlueNile. Name another industry where the Internet has had a similar impact.

How would advise the firm as to the levels of output : An industry said to be characterized by monopolistic competition is the apparel industry. Suppose you were hired as a consultant by a firm in this industry. How would advise the firm as to the levels of output

Define what is the percent ionization of the acid : 0.101 M HNO2 solution contains 0.0067 M H+ ions at 25 oC. What is the percent ionization of this acid under these conditions

What is the average velocity of the train : A train moving at a constant speed of 64.0 km/h moves east for 50.0 min, then in a direction 40.0° east of due north for 19.0 min, and then west for 53.0 min

What price should she charge to perform a nose operation : Dr. Leona Williams, a well-known plastic surgeon, has a reputation for being one of the best surgeons for reconstructive nose surgery. Dr. Williams enjoys a rather substantial degree of market power in this market.

Describe the solubility of potassium nitrate : A 20 degrees Celsius, the solubility of potassium nitrate is 30g in 100g of water. A 35 gram solution of potassium nitrate in water was determined to contain 10 grams of KNO3

How businesses of many firms interact with diversity in it : 1. Understanding the challenges of maintaining growth as a diversified user in an Information Technology environment. 2. Recognizing how the businesses of many firms interact with diversity in the IT

Explain what is the formula for rhenium oxide : A crystalline unit cell contains oxygen atoms on all edges of the cell and rhenium atoms on each corner. What is the formula for rhenium oxide

What is the rate of return earned by most firms : There are 300 purely competetive farms in the local dairy market. Of the 300 dairy farms, 298 have a cost structure that generates profits of $24 for every $300 invested. What is their percentage rate of return

User Account

All Pages