Saturday, January 9, 2016

The XYZ firm's total cost function is TC=5Q^2 + 20Q+100. If the firm's product could sell in a competitive market at a price of $120 per unit, what...


You may evaluate the profit function, such that:






The first order condition for profit maximization is , such that:




You may evaluate the profit function, such that:






The first order condition for profit maximization is , such that:




The total maximized profit is obtained by substituting -10 into the equation of , such that:





Hence, the total maximized profit is $400.

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