Question 1: Your first task is to determine whether your firm is in a competitive industry. Based on the following demand function for the firm’s product, what would you answer? Q = 50,000 – 25*P Q is the amount produced and P is the price.
Question 2: At the profit-maximizing level, what is the relationship between marginal cost, marginal revenue, price, and average cost for firms in competitive and oligopolistic industries? The CFO has provided the following information to you: fixed costs for the MiniZ are $2.75 million variable cost per unit is $200
Question 3: Find Q, P, average cost, and profit for the MiniZ at the profit-maximizing level. (Again, the demand function for the MiniZ is: Q = 50,000 – 25*P.)