Your consulting firm was just granted an exclusive contract for your state. You now must decide your pricing policy, given the following relationships:
P = $1400 – 0.0004Q
MR = $1400 – 0.0008Q
AVC = $1000
where P is the price, Q the quantity, and AVC the average variable cost.
The firm will encounter no fixed costs, and all revenue is after taxes. As your firm has been granted an exclusive contract, your pricing and output decisions will be those of a monopolist.
Tasks: 1.Using the data above, calculate the output the firm will provide. 2.Determine the price at this output level. 3.Complete the Microsoft Excel Template given below using the data in the problem. 4.Check whether your data is consistent with your calculations in question 1. Why or why not? 5.Now assume that the state decides to give as many contracts as it can for the same activity, so your firm is now operating in a perfectly competitive market. How will your price and output decisions change? Explain the differences and why these changes happened.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more