TC = $2, 000,000 + $1,500Q + $0.5Q
2
MC
=
∂
∂
=
,
+
TC Q
$1 500 $1Q
(a)Calculate output, marginal cost, average cost, price, and profit
at the average costminimizing activity level.
7.
The demand curve and the marginal revenue relations of
Restaurant Marketing Services, Inc. are:
P = $130  $0.000125Q
MR =
∂
∂
=

.
TR Q
$130
$0 00025Q
(a)Calculate output, price, and total revenue at the revenue
maximizing activity level.
8.
Coupon Promotions, Inc. has the following demand function for its
coupon books:
Q = 10,000 – 5,000P + 0.02Pop + 0.4I + 0.6A
Where Q is the quantity, P is the price, Pop is population, I is
disposable income per capita, and A is advertising
expenditures.
(a)Determine the demand curve faced by CPI in a typical market
where Pop = 1,000,000 person, I = $35,000 and A = $10,000. Show
the demand curve with quantity expressed as a function of price,
and price expressed as a function of quantity.
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