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The Demand for a Firm's Product Is Given by the Equation

question 5

Essay

The demand for a firm's product is given by the equation: P = 36 - .2Q. The firm's cost equation is given by C = 200 + 20Q.
(a) Determine the firm's optimal quantity and price.
(b) Suppose that the firm’s costs change to C = 100 + 24Q. Determine the new optimal quantity and price. Explain why the results differ from the previous case.


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