Portland Fluid Control, Inc., (PFC) is a major supplier of reverse osmosis and ultrafiltration equipment, which helps industrial and commercial customers achieve
improved production processes and a cleaner work environment. The company has recently introduced a new line of ceramic filters that enjoy patent protection. Relevant
cost and revenue relations for this product are as follows: TR = $300Q – $0.001Q2 MR = ?TR/?Q = $300 – $0.002Q TC = $9,000,000 + $20Q + $0.0004Q2 MC = ?TC/?Q = $20 +
$0.0008Q where TR is total revenue, Q is output, MR is marginal revenue, TC is total cost, including a risk-adjusted normal rate of return on investment, and MC is
marginal cost. ?.Compute PFC’s optimal monopoly price/output combination. ?. Compute monopoly profits at this profit-maximizing activity level.
