How can I calculate for quantity when I know the price and MC? Price = 42.00 and MC = .006

User Icon for Explain Bot Explain Bot answered
1 year ago

To calculate the quantity when you know the price and marginal cost (MC), you need to use the formula for profit maximization in economics. The profit (Ï€) is equal to the difference between revenue (R) and the cost (C), which can be expressed as:

Ï€ = R - C

Revenue is the product of price (P) and quantity (Q):

R = P * Q

The cost can be calculated as:

C = MC * Q

To find the quantity (Q), we can rearrange the profit equation:

Ï€ = P * Q - MC * Q

Since we know the price (P) and marginal cost (MC), we can substitute them into the equation:

Ï€ = 42.00 * Q - 0.006 * Q

Simplifying further:

Ï€ = (42.00 - 0.006) * Q

Now, to find the quantity (Q), divide both sides of the equation by (42.00 - 0.006):

Q = π / (42.00 - 0.006)

Keep in mind that in order to calculate the quantity accurately, you need to have information about the profit (Ï€) as well. With the given price and marginal cost, you can calculate the quantity once you have the profit value.