The Lumins Lamp Company, a producer of old-style oil lamps, estimated the following demand function for its product:
Q=120,000−10,000PQ=120,000−10,000P
where Q is the quantity demanded per year and P is the price per lamp. The firm’s fixed costs are $12,000 and variable costs are $1.50 per lamp.
What is the total cost (TC) function in terms of Q?
What is the marginal cost (MC) function?
Which of the following is an equation for total profits (Ï€) in terms of Q?