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A software producer has fixed costs of $20,000 per month

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A software producer has fixed costs of $20,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below;Q TVC Price;2,000 $5,000 $20;4,000 7,000 15;6,000 18,000 10;8,000 33,000 5;10,000 50,000 1;(a.) If software can only be produced in the quantities above, what should be the production level if the producer operates in a monopolistic competitive market where the price of software at each possible quantity is also listed above? Why? (Show all work).;(b.) What should be the production level if fixed costs rose to $70,000 per month? Explain

 

Paper#32599 | Written in 18-Jul-2015

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