Question

TR=36.28q-2.50q^2  TC=40+60q-8q^2

find

a)profit function

b)q^*,p^*TC^*,AR^*,AC^*

c)nature of product

d) nature of market e)nature of return

Answer 1

$a)Profitfunction=Totolrevenue−Totalcost$

$=36.28q−2.50q^ 2 −40+60q−8q^ 2$

$Profitfunction=96.28q−10.5q ^ 2 −40$

 $b) i)AR = 36.28 -2.5q$

$ii)AC = 40/q+60-8q$

$iii) TR = P.Q$

$P = TR/q$

$= \frac {36.28q-2.50q^2}{q}$

$P$ $= 36.28-2.5q$

$MC = 60-16q$

$MR = 36.28 -5q$

$MC = MR$

$60-16q = 36.28-5q$

$60-36.28 = -5q-16q$

$= 23.72 = 11q$

$q = \frac{23.72}{11}$

$q = 2.16$

$iv) P = 36.28-2.5q$

$P = 36.28 -2.5(2.6)$

$P = 36.28-6.5$

$P = 29.78$