Answered: C = 250,000 + 40Q + 0.01Q2, and market…

C = 250,000 + 40Q + 0.01Q2, and market demand function: P = 940 – 0.02Q (a) Determine the firm’s profit function. (b) Determine the firm’s OPTIMAL output level.

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

Chapter7: Production Economics

Section: Chapter Questions

Problem 6E

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Question

Consider a manufacturing firm with total cost function:

TC = 250,000 + 40Q + 0.01Q², and market demand function: P = 940 – 0.02Q

(a) Determine the firm’s profit function.

(b) Determine the firm’s OPTIMAL output level.

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