The total revenue curve of a firm is R(q) = 40q − 12q^2 and its average cost A(q) =1/30q^2− 12.85q + 20 + 400/q ,where q is the firms output. (I) Determine the level of output for which the firm's profit is maximized. (ii) What is the firm's maximum profit?
The total revenue curve of a firm is R(q) = 40q − 12q^2 and its average cost A(q) =1/30q^2− 12.85q + 20 + 400/q ,where q is the firms output. (I) Determine the level of output for which the firm's profit is maximized. (ii) What is the firm's maximum profit?
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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The total revenue curve of a firm is R(q) = 40q − 12q^2 and its average cost A(q) =1/30q^2− 12.85q + 20 + 400/q ,where q is the firms output.
(I) Determine the level of output for which the firm's profit is maximized.
(ii) What is the firm's maximum profit?
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