Suppose the firms demand curve for its product increases fro

Suppose the firm\'s demand curve for its product increases from D1 to D2. The firm\'s marginal

cost is given by MC = 5Q.

A. Solve for the change in the profit-maximizing quantity resulting from the increase in demand.

B. Solve for the change in the profit-maximizing price resulting from the increase in demand.

2. Figure 9.12 Price (S) 20 18 16 14 12 10 4 Di 2 4 8 Quantity

Solution

A)Profit Maximizing quantity is=4 unit

B) Profit maximizing price is = $6