The market demand for a monopoly firm is estimated to be: Q d = 80,000 -400 P + 3 M + 2000 P R where Q is output, P is price, M is income, and P R is…

The market demand for a monopoly firm is estimated to be:

Qd = 80,000 -400P + 3M + 2000PR

where Q is output, P is price, M is income, and PR is the price of a related good. The manager has forecasted the values of M and PR will be $60,000 and $15, respectively, in 2008.

The average variable cost function is estimated to beAVC = 725 – 0.01 Q + 0.000001 Q 2Total fixed cost in 2008 is expected to be $50,000.

The profit-maximizing level of output for 2008 is…

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