Carefully read the case given below, critically analyze it and answer the questions that follow:       ABC Electronics Limited, operating in Kathmandu Valley has the   following demand and cost functions,       P= 2000 - 10Q. TC = 1000 + 200Q, where Q= output in units, P = Price in Rs       If the company wanted to maximize profit, what is the price-output combination and total profit and revenue? The management of the   company realizes the need for capturing market. Therefore, it started to promote its product with the strategy of sales- revenue maximization instead of profit maximization What will be the price output combination, total profit and maximum TR under the condition of sales- revenue maximization?

Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter11: Price-searcher Markets With High Entry Barriers
Section: Chapter Questions
Problem 14CQ
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Carefully read the case given below, critically analyze it and answer the questions that follow:

 

 

 

ABC Electronics Limited, operating in Kathmandu Valley has the

 

following demand and cost functions,

 

 

 

P= 2000 - 10Q. TC = 1000 + 200Q, where Q= output in units, P = Price in Rs

 

 

 

If the company wanted to maximize profit, what is the price-output combination and total profit and revenue? The management of the

 

company realizes the need for capturing market. Therefore, it started to promote its product with the strategy of sales- revenue maximization instead of profit maximization What will be the price output combination, total profit and maximum TR under the condition of sales- revenue maximization?

 

 

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