Suppose a firm is operating under a competitive market conditions and the going price for its product is $260. If the firm's short run Total Variable Cost (TVC) function is
TVC = 80Q - 6Q2 + 0.2Q3
Total fixed is cost = $1000
a. What is the firm's profit maximizing output?
b. How much profit will the firm make?© BrainMass Inc. brainmass.com October 10, 2019, 12:53 am ad1c9bdddf
Profit is maximized when marginal cost is the same as marginal revenue. We are given the total cost function, which we can differentiate to find marginal revenue:
MC= 80 - ...
The expert determines the profit maximizing output. The competitive market conditions are examined.