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    Finding optimal production level

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    You own a small firm that manufactures and sells a standardized product in a marketplace that closely resembles perfect competition. You have estimated your total cost function at C(Q) = Q + 3Q^2, and your marginal cost function as MC = 1 + 6Q. In trying to plan for the upcoming year, you estimate there is a 75 percent chance the market price will be $100 and a 25% chance it will be $120.

    How many units should you produce to maximize expected profits?

    What is your expected profit or loss?

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    https://brainmass.com/economics/price-levels/finding-optimal-production-level-328859

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    How many units should you produce to maximize expected profits?

    Expected ...

    Solution Summary

    Solution describes the steps to find output level which can maximize expected profits.

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