# Managerial Economics- URGENT

The Blue Dragon Restaurant is a new Chinese Restaurant in town. As the only Chinese restaurant in the area, it faces the following daily demand curve:

Q = 500 – 25 P

Where Q is the number of meals it serves per day and P is the average price of its meals.
The cost function of the restaurant has been estimated as follows:

TC = 200 + 8 Q + .02 Q^2
a. Determine the profit-maximizing price of each meal assuming The Blue Dragon is behaving as a monopoly.
b. Determine the profit of the Restaurant.
c. If the company were to produce as a perfectly competitive firm, how much would it produce?
d. What price should it charge as a competitive firm?
e. Would it still make a profit if it behaved like a competitive firm?
As a result of the success of the Blue Dragon other Chinese restaurants start appearing in the area. As the Blue Dragon’s customers gradually start trying other (new) Chinese restaurants, its demand curve gets flatter (more elastic) and shifts to the left. In reaction, The Blue Dragon lowers its price and adjust its output to the point that, eventually, its (economic) profit disappears; It becomes equal to zero. At that point the slope of its demand curve becomes -0.03 .
f. Determine the new (equilibrium) average price The Blue Dragon charges for its meals.
g. Write the equation for this new (zero profit) demand curve.

Hint:
MC = 8 + .04 Q
Slope of ATC = -200/Q^2 + .02

On Wed., Dec 13, Heather asked a very similar question. See my post.

1. 👍 0
2. 👎 0
3. 👁 86

## Similar Questions

1. ### Math

Alex's favorite restaurant is a buffet-style Chinese restaurant downtown. Each time he goes, he chooses 2 appetizers and 1 entree. If the restaurant has four appetizers and 5 entrees to choose from, how many, times could Alex go

asked by Tom on April 6, 2014
2. ### English

1. We went far. 2. We went a long way. 3. The restaurant is far from here. 4. The restaurant is a long way from here. 5. The restaurant is not far from here. 6. The restaurant is not a long way from here. 7. How far is it from

asked by rfvv on November 24, 2016
3. ### Name

I have a project, and I'm doing an italian restaurant. I have to pick a name for my restaurant. I was thinking of calling it Little Italy, but isnt there a restaurant with that name?

asked by Celest on April 15, 2013
4. ### English

There is a stranger near the museum. You have to give directions to the stranger so that he or she may find the right place. 1. Show him the way to the restaurant. 2. Tell him how to get to the restaurant. 3. Show the way to the

asked by John on October 28, 2008
5. ### English

A: I'm very hungry. B: Let's go to the restaurant then. (In this sentence, what is the use of 'the' before 'restaurant'? Does it refer to the specific restaurant or is 'the' used in generic usage?)

asked by rfvv on September 24, 2012
6. ### statistics

In a certain city, a fast food chain feels it is giving a bad reputation because it takes too long to serve the customer. Since the chain had four restaurants in this town, it is concerned with whether all restaurants have the

asked by Loyd on August 23, 2014
7. ### math/algebra

I’m working at this restaurant making \$30,000 a year. Another restaurant really wants to have me manage their restaurant they are offering to pay me 2 ¾ times more then I make now. How much would I be making? show this is done

asked by toni on June 3, 2012
8. ### Math

Etienne owns a small recycling company that picks up empty glass bottles from restaurants. At the first restaurant, he picks up 50 bottles. At each restaurant after this, he picks up 4 more bottles than he picked up at the

asked by Alex on September 17, 2014
9. ### Algebra

At the new Cozy Inn Restaurant, which is still under construction, the owners have hired enough waiters and waitresses to handle 17 tables of customers. The fire marshall has looked at the plans for the restaurant and says he will

asked by Bob Ross on May 10, 2018
10. ### English

The Chinese restaurant is on the fire station. (When the fire station is on the second floor, and the restaurant is on the first floor, can we use this expression?)

asked by rfvv on November 10, 2010

More Similar Questions