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Calculating maximum profit made by a coal producer

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A coal producer has the following total cost function:

TC=$187,500+$5Q+$0.0003Q^2

where Q is tons of coal produced per month. Calculate the firm's maximum profit if coal price is stable at $20/ton.

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Solution depicts the steps to calculate maximum profit made by a coal producer in the given case.

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Solution:

TC=187500+5Q+0.0003Q^2
Marginal Cost=MC=d(TC)/dQ=5+0.0006Q

Since price is stable at $20/ton,
Marginal Revenue (MR)=Price=$20

A ...

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  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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