Given the firms demand function Q=55-0.5P, and the total cost function TC=20+Q+0

Question

Given the firms demand function Q=55-0.5P, and the total cost function TC=20+Q+0.2Q^2 where TC= total cost, determine: a)the total revenue function for the firm. b)the marginal revenue and marginal cost functions and find the rate of output for which marginal revenue equals marginal cost. c)an equation for profit by subtracting the total cost function from the total revenue function. Find the level of output that maximizes total profit. Compare your answer to that obtained in part (b). Is there any correspondence between these answers?

Explanation / Answer

a)TR=20Q+Q^2+0.2Q^3 b)MR=20+2Q+0.6Q^2 MC=1+0.4Q c)19Q+0.8Q^2+0.2Q^3-20

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