Answered: Suppose that the total cost function of…

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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Suppose that the total cost function of a firm is given as follows;

TC = 500 + 2Q²

And the price of the firms product is determined by the market equilibrium at $100.

a) set the profit maximizing condition. Find the profit maximizing output level for the firm.

b) what is the total revenue

c) what is the total cost?

d) what is the profit earned by the firm

e) illustrate your answer by using a well labeled graph.

Definition Video Formula Definition Phenomenon in which market supply and demand balance each other. Market equilibrium is the economic state in which the market demand curve intersects the market supply curve, giving us the equilibrium price and equilibrium quantity for which a commodity can be sold and purchased in an economy. When market equilibrium is achieved, it suggests that all resources have been allocated efficiently and that there is just a distribution of income and resources in the economy. Video Formula

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