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firm in an oligopolistic industry

A firm in an oligopolistic industry has the following demand and total cost equations

P = 600 - 20Q

TC = 700 + 160Q + 15Q squared

Calculate:

A. Quantity at which profit is maximized

B. Maximum profit

C. Quantity at which revenue is maximized

D.Maximum revenue

E. Maximum quantity at which profit will be at least $850

F. Maximum revenue at which profit will be at least $580

Solution Preview

A firm in an oligopolistic industry has the following demand and total cost equations
P = 600 - 20Q
TC = 700 + 160Q + 15Q squared
Calculate:

A. Quantity at which profit is maximized
The demand curve is P = 600 - 20Q
then marginal revenue is MR = 600 - 40Q
Marginal cost is MC = dTC / dQ = 160 + 30Q
The first order condition for profit maximization is MR = MC, i.e.,
600 - 40Q = 160 + 30Q
70Q = ...

Solution Summary

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