The total revenue curve of a firm is R(q) = 40q − 12q2 and its average cost A(q) = 1/30q2 − 12.85q + 20 + 400/q. The total cost function is C(q) = 1/30q3 – 12.85q2 + 20q + 400 . The profit function is Π(q)= –1/30q3 + 0.85q2 + 20q – 400 (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 − 12q2 and its average cost A(q) = 1/30q2 − 12.85q + 20 + 400/q. The total cost function is C(q) = 1/30q3 – 12.85q2 + 20q + 400 . The profit function is Π(q)= –1/30q3 + 0.85q2 + 20q – 400 (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

Chapter11: Price And Output Determination: Monopoly And Dominant Firms

Section: Chapter Questions

Problem 3E

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