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…