Question

Suppose that the firm operates in a perfect compitative market. The market price of his product is 4. The firm estimate its cost production with the following cost gunction

Tc=50+20q-5q2+p.33q3

What is level of output should be the firm produce to maximize its profit

Answer 1

$T_c'=20-10q+3q^2,$

$T_c''=-10+6q,$

$T_c''=0,$

$q=1.67,$

$T_c=74.07.$