Write the equation for the total cost function

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The Jenkis Tool Company estimated the following demand equation for it's product: QD=12,000-4,000 P Where P=price/unit QD=quantity demanded/year The firm's total costs are $4,000 when nothing is being produced. These costs increase by 50 cents for each unit produced.

a. Write the equation for the total cost function.

b. Specify the marginal cost function.

c. Write an equation for total revenue in terms of Q.

d. Specify the marginal revenue function.

e. Write an equation for total profits, ?, in term of of Q. At what level of output are total profits maximized (i.e., find the maximum of the total profit function)? What price will be charged? What will total profit be?

f. Check your answers in Parte € by equating marginal cost and marginal revenue and solving for Q. g. What model of market pricing behavior has been assumed in this problem?

Reference no: EM13213238

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