# P,R and C Diagram

A Taco manufacturer can produce T tons of tacos per day at a cost of C=A+2T+0.1T2

Tacos sell competitively at $42 per ton and the cost of renting the taco factory and all other fixed factors A=$3000 per day.

A. Express revenue (R) and profits (P) and each as a function of T. Sketch C, R and P in a single diagram.

B. What is the profit maximizing rate of output?

C. The rental rate rises from $3000 to $4000. What is the effect on output?

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