[microconomi]

Time Jeans, Co located in London, is a private producer of fashion
Jeans and clothing. John Time, founder and general manager, has recently announced his
Retirement. Your company, a potential entrant into the market for jeans, wants to evaluate the shortand
Long-run potential of this market. Based on data gathered from your company's research
Department, customer surveys, trade associations, and other sources, the following market demand and
Cost information has been developed:

P = $5400 - $1.5Q,
MR = $5400 - $3Q,
TC = $400Q $0.5Q2
MC = $400 $1Q,

Where P is price, Q is units measured by the number of pairs of jeans, MR is marginal revenue, TC is
Total costs including a normal rate of return, MC is marginal cost.


A) Assume that these demand and cost data are descriptive of Time's operations
Calculate output, price, and economic profits earned by Time Jeans.