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Marginal Analysis Global Corp

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(see attached for full problem description)

Global Corp. sells its output at the market price of $9 per unit. Each plant has the costs shown below:

What is the profit at each plant when operating at its optimal output level?

Suppose that you can sell as much of a product (in integer units) as you like at $61 per unit. Your marginal cost (MC) for producing the qth unit is given by:


This means that each unit costs more to produce than the previous one (e.g., the first unit costs 9*1, the second unit (by itself) costs 9*2, etc.).

If fixed costs are $50, what is the optimal output level?

Please specify your answer as an integer.

Assume that a competitive firm has the total cost function:

TC = 1q3 - 40q2 + 710q + 1700

Suppose the price of the firm's output (sold in integer units) is $550 per unit.

Using tables (but not calculus) to find a solution, what is the total profit at the optimal output level?

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Solution Summary

This solution helps to find out optimal output for profit maximization.

Solution provided by:
  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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