Microeconomy
posted by Ann .
uppose the demand for these jets is given by the equation:
P = 3000  Q,
where Q denotes the quantity of jets, and P denotes its price.
So that the marginal revenue facing the firm is:
MR = 3000  2Q.
The marginal cost of Lockheed Martin is given by the equation:
MC(Q) = 2Q
while the average variable cost is:
AVC(Q) = Q
Further it is known that Lockheed Martin has fixed costs of 500.
Suppose Lockheed sets one price for all its customers, what is the profit maximizing quantity in this case?
I found
Q*=750
P*=2250
WHAT IS FIRM'S PROFIT???????????
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