# Economics

posted by .

Willy's widgets, a monopoly, faces the following demand schedule (sales of widgets per month):

Price \$20 30 40 50 60 70 80 90 100
Quantity 40 35 30 25 20 15 10 5 0

Calculate marginal revenue over each interval in the schedule (for example, between Q = 40 and Q=35). Recall that the revenue is the added revenue from an additional unit of production/sales and assume MR is constant within each interval.
If marginal cost is constant at \$20 and total fixed cost is \$100, what is the profit maximizing output level and price. Does the firm earn a profit or loss and how much is it?

Here's what I got...although I would double-check my work as I quickly input the data. After running a regression analysis, I got an inverse demand function of P = 100 - 2Q. MR = a + 2bQ and MC = 20. Therefore, equating MR and MC will provide the profit-maximizing quantity. Once the quantity is derived, input that number in the inverse demand function to get your profit-maiximizing price. The rest is down hill. Calculate total revenue, then subtract total costs from this to get profit. Again, double-check my work.

• Economics -

1) In using regression analysis for making predictions what are the assumptions
involved.
2 What is a simple linear regression model?
3) What is a scatter diagram method?

## Respond to this Question

 First Name School Subject Your Answer

## Similar Questions

1. ### economics

Willy’s widgets, a monopoly, faces the following demand schedule (sales of widgets per month): Price
2. ### ECONOMICS

Willy’s widgets, a monopoly, faces the following demand schedule (sales of widgets per month): Price
3. ### Econ

The demand for widgets (QX) is given by the following equation: QX = 425-PX¡V1.5PW¡V1.25PG+0.8PY+0.1 M where QX= number of units of widgets sold per week PX = the price of widgets = 400 PW = the price of woozles = 50 PG = the price …
4. ### Economics

Assume the demand for beef is given by Qd = 22 + 0.1 Y – 10Pb + 5 Pc And the supply of beef is given by: Qs = -400 + 500Pb – 200 Pf where Qd denotes quantity of beef demanded, Qs denotes quantity supplied, Pb denotes price, of …
5. ### Economics

A monopoly produces widgets at a marginal cost of \$8 per unit and zero fixed costs. It faces an inverse demand function given by P = 38 - Q. What are the profits of the monopoly in equilibrium?
6. ### Economics

Suppose that the equilibrium quantity in the market for widgets has been 200 per month. Then a tax of \$5 per widget is imposed on widgets. The price paid by buyers increases by \$2 and the after-tax price received by sellers falls by …
7. ### economics

Suppose the price of widgets falls from \$7 to \$5 and consumption of widgets rises from 15 widgets a month to 25 widgets. Calculate your price elasticity of demand of widgets. What can you say about your price elasticity of demand of …
8. ### microeconomics

1. Suppose that an increase in the price of carrots from \$1.20 to \$1.40 per pound raises the amount of carrots that carrot farmers produce from 1.2 million pounds to 1.6 million pounds. Using the midpoint method, what would be the …
9. ### econmics

Suppose the price of widgets rises from \$7 to \$9 and consumption of widgets falls from 25 widgets a month to 15 widgets. Calculate your price elasticity of demand of widgets. What can you say about your price elasticity of demand of …
10. ### Help!Microeconomics

Central Crude Oil is a crude oil monopoly in a market. The following table shows the liner demand schedule of this firm which cannot apply price discrimination. The firm's fixed cost is \$2000 per month and its marginal cost is a constant …

More Similar Questions