P = 120 - 7Q TC = 40 + 70Q - 10Q2 + 0.6Q3 Where P = price, and Q is output. Fill

Question

P = 120 - 7Q TC = 40 + 70Q - 10Q2 + 0.6Q3 Where P = price, and Q is output.

Fill in the table below and answer the questions below the table.

If your company’s goal is to maximize profit, answer the following questions below:

What price will you charge for your product?

What quantity will you produce?

And what would be your maximum profit or minimum loss at the price and output you chose?

2. If your company’s goal is to maximize total revenue, answer the following questions below:

What price will you charge for your product?

What quantity will you produce?

And what would be your maximum total revenue at the price and output you chose?

Q P FC TVC TC TR Profit 0 1 2 3 4 5 6 7 8 9 10

Explanation / Answer

P = 120 - 7Q TC = 40 + 70Q - 10Q2 + 0.6Q3 Where P = price, and Q is output.

Fill in the table below and answer the questions below the table.

1. If my goal is proift maximization I will charge $71 per unit and earn aprofit of $320

I will produce 7 units.

We have put the value fo Q in differerrent function to reach at cost and price

Cost at zero level si fixed cost

TR = Price *Quantity

Profit = TR-TC

2. If my goal is revenue maximization, I will produce 7 units only because it gives me a revenue fo 568 which is maximm (it is a coincidence. Do not misunderstand that two levels always exist at same level of output)

Q P FC TVC TC TR Profit 0 120 40 60.6 100.6 0 -100.6 1 113 40 104.80 144.80 113 -31.80 2 106 40 238.2 278.2 212 -66.2 3 99 40 158.40 198.40 297 101.60 4 92 40 175 215 276 61 5 85 40 189.60 239.60 510 270.60 6 78 40 205.80 254.80 546 291.20 7 71 40 207.20 247.20 568 320.80 8 64 40 207.40 247.40 512 264.60 9 57 40 257.40 297.40 513 215.60 10 40 40 300 340 500 160

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