A perfect competitive firm has a total revenue and total cost curves given as.TC=100Q and TC =5000+2Q+0.2Q^2 find the profit maximising out of.the firm. What profit does the.firm make?
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Expert's answer
2018-05-01T09:47:08-0400
A perfect competitive firm has a total revenue and total cost curves given as: TR = 100Q and TC = 5000 + 2Q + 0.2Q^2. The profit-maximising output of the firm is at MR = MC = P, then: TR' = TC', 100 = 2 + 0.4Q, Q = 245 units, P = $100. The profit is: TP = TR - TC = 100*245 - (5000 + 2*245 + 0.2*245^2) = $7005.
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