Question

Suppose the demand function for widgets is given by:
Q = 500 - 5P

Where Q is the quantity of widgets measured in units and P is the price per unit of widgets. The cost function is given by:
C = 30 + 16Q

Complete (1) through (7) using the spreadsheet program Excel.

1. Derive the revenue (R) function
2. Derive the profit (π) function
3. Set the marginal profit (Mπ) function equal to zero and solve for the π-maximizing level of output (Q).
4. Use the inverse demand function to find the π-maximizing price (P)
5. Derive the marginal revenue (MR) function
6. Derive the marginal cost (MC) function

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1. Derive the revenue (R) function

Revenue function is given as quantity multiplied by price
TR = P * (500-5P)
TR = 500P - 5P²...

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