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Worth operating or should they shut down

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Question

Acme is a monopolist for a good with inverse demand ?? = 3060 - 6??, where ?? is the price in dollars and ?? is the amount sold. Acme's variable costs are ??????(??) = 3??2. With these functions, the marginal revenue is ????(??) = 3060 - 12?? and marginal cost is ????(??) = 6??.

1. If Acme has no fixed costs, what is its profit maximizing price?

2. If Acme has non-sunk fixed costs of $300,000, is it worth operating or should they shut down?

Reference no: EM133446890

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