Maximize where Marginal cost = Marginal revenue.
MC is the first derivitive of TC. Same same for MR. So
MR = 300 - Q
MC = 60 + 2Q
Set MC=MR and solve for Q. Plug this Q back into TC and TR to calculate profit.
AC = TC/Q = 5000/Q + 60 +Q
For a minimum, take the derivitive of this, then set the equation = zero and solve for Q.
The manager of caribbean glass company estimates that total revenue from the sale of her firm's product is given by the equation TR=300Q-Qsquared/2. The total cost equation is TC=5,000 + 60Q + Qsquared
What are the profit maximizing price and output rate? What is the amount of Economic profit?
At what output rate is is average cost at a minimum? At this output rate what is the amount of economic profit?
2 answers
AC = TC/Q = 5000/Q + 60 +Q
1 answer