The Market Demand for a Type of Carpet Known as KP-7

question 59

Essay

The market demand for a type of carpet known as KP-7 has been estimated as:
P = 40 - 0.25Q,
where P is price ($/yard) and Q is rate of sales (hundreds of yards per month). The market supply is expressed as:
P = 5.0 + 0.05Q.
A typical firm in this market has a total cost function given as:
C = 100 - 20.0q + 2.0q².
a. Determine the equilibrium market output rate and price.
b. Determine the output rate for a typical firm.
c. Determine the rate of profit (or loss) earned by the typical firm.

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Definitions:

Salaries

Regular payments made to employees, usually monthly or biweekly, in exchange for their labor or services, not typically dependent on hours worked.

Total Compensation

The complete package of salary, bonuses, benefits, and other forms of pay provided by an employer to an employee.

Paid Executives

High-level officers or managers within a company who are compensated with a substantial salary, bonuses, and often, benefits and stock options.

Labour Costs

Expenses related to compensating employees for their work, including wages, salaries, and benefits.