Ms. Aura is a psychic. The demand for her services is given by Q = 2,000 - 10P, where Qis the number of one-hour sessions per year and Pis the price of each session. Her marginal revenue is MR = 200 - 0.2Q. Ms. Aura's operation has no fixed costs, but she incurs a cost of $150 per session (going to the client's house). a. What is Ms. Aura's yearly profit? Find the number of sessions that Ms. Aura will provide by equating the marginal revenue to the marginal cost of a session: setting MR = MC yields 200 - 0.2Q = 150 which solves as Q = 250. The price that would generate demand for 250 sessions is $175 as 2,000 - 10 (175) = 250. Thus, her annual profit is 175 (250) - 150 (250) = $6,250 per year.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Ms. Aura is a psychic. The demand for her services is given by Q = 2,000 - 10P, where Qis the number of one-hour sessions per year and Pis ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Investors Fund, a large financial institution, announces that it will start monitoring its employees' electronic communications. If Mary, an Investors Fund employee, resists this policy, her best argu-ment is that the monitoring violates
Answers (1)
The majority of products that we purchase in america are produced where?
Answers (2)
Sharon Foods Company reported the following transactions for September 2017. a) The business received a $21,000 cash contribution from the owner. It was credited to Sharon, Capital.
Answers (1)
Which of the following conditions will maximize the amount of interest you earn?
Answers (1)
Gershwin Wallcovering Inc. shipped the wrong shade of paint to a customer. The customer agreed to keep the paint upon being offered a 15% price reduction.
Answers (1)
New Questions in Business
involves matching the candidate's intellectual and physical skills to those of the job being filled. a. Person-organization fit b. Cognitive analytics c. Ability-job fit d. Personality-ability fit e. Personality-job fit
Answers (1)
Assume that a $1,000,000 par value, semiannual coupon US Treasury note with five years to maturity has a coupon rate of 6%. The yield to maturity (YTM) of the bond is 11.00%.
Answers (2)
The shareholders' equity of Green Corporation includes $200,000 of $1 par common stock and $400,000 par of 6% cumulative preferred stock.
Answers (1)
True or False: An interest-bearing account is an account that generates interest income on the available balance in the account. → False
Answers (1)
Answer the question on the basis of the following information for a bond having no expiration date: bond price = $1,000; bond fixed annual interest payment = $100; bond annual interest rate = 10 percent. Refer to the given information.
Answers (1)