Finding the optimal price and output levels
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Currently the total cost is given by TC = 100 + 10Q +Q^2 for sale shoe manufacturing company. The demand equation is given by P =-5Q +130. How many units should the company produce to maximize its profit? What is the price that company charges? What are the profit, total revenues, and total cost of the company?
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Solution Summary
Solution describes the steps to calculate optimal output and price level in the given case. It also calculates total cost, total revenue and total profit at that level.
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Total Cost=TC=100+10Q+Q^2
Marginal Cost=MC=dTC/dQ=10+2Q
P=-5Q+130
Total Revenue=TR=P*Q=(-5Q+130)*Q=-5Q^2+130Q
Marginal ...
Education
- BEng (Hons) , Birla Institute of Technology and Science, India
- MSc (Hons) , Birla Institute of Technology and Science, India
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