Question

Assume that all perfectly competitive webpage design companies are selling identical services at $1000 per page. If each shop has a marginal cost curve written as MC =800 + 0.5Q, where Q equals the number of webpages designed each day, what is the profit-maximizing quantity of pages that each company will want to sell each day?

Answer 1

Profit-maximizing quantity is obtained when;

Price = Marginal Cost

$1000=800+0.5Q$

$1000-800=0.5Q$

$200=0.5Q$

$Q=400 Pages$