Question #297257

For the following total-revenue and total-cost functions of a firm:



TR = 22Q - 0.5Q ^ 2 ,



TC=\ Q^ 2 -8.5Q^ 2 +50Q+90



(a) Determine the level of output at which the firm maximizes its total profit. (b) Determine the

1
Expert's answer
2022-02-16T12:48:19-0500

A) TR=22Q0.5Q2TR=22Q-0.5Q^2

Differentiating TR yields;

TR=MR=22QTR'=MR=22-Q

TC=Q28.5Q2+50Q+90TC=Q^2-8.5Q^2+50Q+90

TC=7.5Q2+50Q+90TC=-7.5Q^2+50Q+90

Differentiating TC yields;

TC=MC=15Q+50TC'=MC=-15Q+50

The level of output at which the firm maximizes its total profit is;

MR=MCMR=MC MR=MC

22Q=15Q+5022-Q=-15Q+50

Q+15Q=5022Q+15Q=50-22

16Q=2816Q=28

Q=28/16Q=28/16

Q=1.75unitsQ=1.75 units


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Comments

Sabir khan
22.02.24, 13:01

I am satisfied

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