Explore BrainMass

Explore BrainMass

    Profit Maximizing firm in Competitive industry

    Not what you're looking for? Search our solutions OR ask your own Custom question.

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    A firm produces a product in a competitive industry and has a total cost function C = 50 + 4q + 2q(squared) and a marginal cost function MC = 4 + 4q. At the given market price of $20, the firm is producing 5 units of output. Is the firm maximizing its profit? What quantity of output should the firm produce in the long run?

    © BrainMass Inc. brainmass.com December 24, 2021, 5:07 pm ad1c9bdddf

    Solution Preview

    For profit maximization marginal revenue= Marginal cost
    Marginal revenue= $20
    Marginal Cost= 4+ 4q

    For profit ...

    Solution Summary

    The solution calculates the quantity of output the firm should produce in the long run.