Answer to Question #283384 in Microeconomics for DAMITH

Question

A firm has the following revenue and cost functions.

Determine the quantity level at which the firm maximizes its total profit.

(Hint: use marginal revenue = marginal cost rule) (

Answer 1

The firm maximizes its total profit, when its marginal revenue equals marginal cost (MR = MC).

$MR = TR'(Q),$

$MC = TC'(Q).$