Question

If P = 15, TC=10 + 5q + q^2, and MC = 5 + 2q, find...

If P = 15, TC=10 + 5q + q^2, and MC = 5 + 2q, find the perfectly competitive firm's maximum profit.

If P = 15, TC=10 + 5q + q^2, and MC = 5 + 2q, find the perfectly competitive firm's profit-maximizing quantity of output.

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Answer #1

If P = 15, TC=10 + 5q + q^2, and MC = 5 + 2q, find the perfectly competitive firm's maximum profit.

The firm produces at MC=P

Where

5+2q=15

2q=10

q=5

P=15

Total revenue =P*Q=15*5=75

Total cost=10+5*5+5^2=60

Profit=TR-TC=75-60=15

The profit is $15

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If P = 15, TC=10 + 5q + q^2, and MC = 5 + 2q, find the perfectly competitive firm's profit-maximizing quantity of output.

The firm produces at MC=P

Where

5+2q=15

2q=10

q=5

The firm produces 5 units

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