A company produces a special new type of TV. The company has fixed costs of $451,000, and it costs $1000 to produce each TV. The company projects that if it charges a price of $2600 for the TV, it will be able to sell 800 TVs. If the company wants to sell 850 TVs, however, it must lower the price to $2300. Assume a linear demand. If the company sets the price at $3800, how much profit can it earn? It can expect to earn/lose $enter your response here. (Round answer to nearest dollar.)

A company produces a special new type of TV. The company has fixed costs of $451,000, and it costs $1000 to produce each TV. The company projects that if it charges a price of $2600 for the TV, it will be able to sell 800 TVs. If the company wants to sell 850 TVs, however, it must lower the price to $2300. Assume a linear demand. If the company sets the price at $3800, how much profit can it earn? It can expect to earn/lose $enter your response here. (Round answer to nearest dollar.)

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter18: Asymmetric Information

Section: Chapter Questions

Problem 18.3P

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Question

A company produces a special new type of TV. The company has fixed costs of

$451,000,

and it costs

$1000

to produce each TV. The company projects that if it charges a price of

$2600

for the TV, it will be able to sell

800

TVs. If the company wants to sell

850

TVs, however, it must lower the price to

$2300.

Assume a linear demand.

If the company sets the price at

$3800,

how much profit can it earn?

It can expect to earn/lose

$enter your response here.

(Round answer to nearest dollar.)

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