A price-setting firm faces the following estimated demand and average variable cost functions:Qd = 800,000 - 2,000P + 0.7M + 4,000PRAVC = 500 - 0.03Q + 0.000001Q2where Qd is the quantity demanded, P is price, M is income, and PR is the price of a related good. The firm expects income to be $40,000 and PR to be $53. Total fixed cost is $2,600,000. What is the estimated demand function for the firm?
A. Qd = 800,000 - 4,000P
B. Qd = 800,000 - 500P
C. Qd = 1,040,000 - 2,000P
D. Qd = 1,600,000 - 2,000P
Answer: C
You might also like to view...
A barter economy is one in which:
A. money serves as a medium of exchange. B. only precious metals are accepted as money. C. goods are traded directly for other goods. D. paper money is backed by gold.
Congress's passage of new laws significantly increasing the regulation of business would tend to ________.
A. increase per-unit production costs and shift the aggregate demand curve to the left B. increase per-unit production costs and shift the aggregate supply curve to the right C. increase per-unit production costs and shift the aggregate demand curve to the right D. increase per-unit production costs and shift the aggregate supply curve to the left
An increase in the money stock has no effect on equilibrium income whenever the
a. IS curve is horizontal. b. IS curve is vertical. c. LM curve is vertical. d. LM curve is horizontal.
Fred receives $14,000 per year from the federal government because he is disabled. This is a
A) demerit good. B) transfer payment. C) non-rival good. D) free rider problem.