A perfectly competitive firm sells its product at a price of$0.10 per unit. Its total and marginal cost functions are: TC= 5 - 0.SQ + 0.001Q2 MC= -0.5 + 0.002Q, where TC is total cost($) and Q is output rate (units per time period). Solve for the profit maximizing quantity for this firm. My Question: in order to determine just profit maximizing quanitity, do we make MR=MC so the equation would be 0.10 = -0.5 + 0.002Q. Solve for Q then plug that number into the Q in the total cost equation to get the profit maximizing quantity?
A perfectly competitive firm sells its product at a price of$0.10 per unit. Its total and marginal cost functions are: TC= 5 - 0.SQ + 0.001Q2 MC= -0.5 + 0.002Q, where TC is total cost($) and Q is output rate (units per time period). Solve for the profit maximizing quantity for this firm. My Question: in order to determine just profit maximizing quanitity, do we make MR=MC so the equation would be 0.10 = -0.5 + 0.002Q. Solve for Q then plug that number into the Q in the total cost equation to get the profit maximizing quantity?
Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
ChapterB: Differential Calculus Techniques In Management
Section: Chapter Questions
Problem 5E
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TC= 5 - 0.SQ + 0.001Q2 MC= -0.5 + 0.002Q,
where TC is total cost($) and Q is output rate (units per time period).
Solve for the profit maximizing quantity for this firm.
My Question: in order to determine just profit maximizing quanitity, do we make MR=MC so the equation would be 0.10 = -0.5 + 0.002Q. Solve for Q then plug that number into the Q in the total cost equation to get the profit maximizing quantity?
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