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Assume That the Market Demand for Pens Is Given by QD

question 143

Essay

Assume that the market demand for pens is given by QD = 650 − 25P and the market supply of pens is given by QS = 200 + 20P.If a firm sells 20 pens and faces an average total cost of $6,calculate the firm's profit.


Definitions:

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given period of time.

Constraint Time

The specific period during which a process, project, or operation is limited or restricted by various constraints.

Constrained Resource

A factor of production that is in limited supply, potentially restricting the output of goods and services.

Profitable Product

An item that brings in more income than the expenses related to its production and sale.

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