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ECO Problem - Portland Fluid Control, Inc., (PFC)




Question;Portland Fluid Control, Inc., (PFC) is a major supplier of reverse osmosis and ultrafiltration equipment, which helps industrial and commercial customers achieve improved production processes and a cleaner work environment. The company has recently introduced a new line of ceramic filters that enjoy patent protection. Relevant cost and revenue relations for this product are as follows: TR = $300Q - $0.001Q2;MR =?TR/?Q = $300 - $0.002Q;TC = $9,000,000 + $20Q + $0.0004Q2;MC =?TC/?Q = $20 + $0.0008Q;where TR is total revenue, Q is output, MR is marginal revenue, TC is total cost, including a risk-adjusted normal rate of return on investment, and MC is marginal cost.;?.Compute PFC?s optimal monopoly price/output combination.;?.Compute monopoly profits at this profit-maximizing activity level.


Paper#57411 | Written in 18-Jul-2015

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