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Ray Of Light [21]
3 years ago
12

. Suppose that a car dealer has a local monopoly selling Volvos. It pays w to Volvo for each car that it sells, and charges each

customer p. The demand curve that the dealer faces is best described by the linear function Q = 30 – p, where the price is in units of thousands of dollars. Suppose that the dealer has no other marginal costs of retailing, so the marginal cost of selling a car is simply the wholesale price w. a. What is the profit-maximizing price for the dealer to set? At this price, how many Volvos will the dealer sell? (Hint: Your answers here will be a function of the wholesale price.)
Business
1 answer:
kicyunya [14]3 years ago
6 0

Answer:

The dealer will sell 15 Volvos

Explanation:

Consider the following formulas to calculate the Q of which optimize the exercise.

Profit = Q*p

Profit = (30-q)*q

Profit = 30q - q^2

Differentiating with respect to q, we get

30-2q = 0

2q = 30

q=15

The dealer will sell 15 Volvos

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PilotLPTM [1.2K]

Answer:

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Ede4ka [16]

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insens350 [35]

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