The market demand for a monopoly firm is estimated to be:Qd = 100,000 - 500P + 2M + 500PRwhere Qd is quantity demanded, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $50,000 and $20, respectively, in 2016. The average variable cost function is estimated to beAVC = 520 - 0.03Q + 0.000001Q2Total fixed cost in 2016 is expected to be $4 million. The estimated marginal cost function is 

A. SMC = 260 - 0.03Q + 0.000015Q2. 
B. SMC = 260 - 0.015Q + 0.000005Q2.
C. SMC = 520 - 0.06Q + 0.000003Q2. 
D. SMC = 520 - 0.03Q + 0.000002Q2. 
E. none of the above


Answer: C

Economics

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Economics