Answer to Question #294284 in Microeconomics for Anketsebirhan

Question

Assume compnay ABC faces the following total revenue and cost function TR=8Q and TC=Q²+4Q+2.find the maximum level of output and profit

Answer 1

For profit maximization,

MR= MC

MR = 8

MC= 2Q+4

$\therefore2Q+4= 8$

$2Q= 4$

Q= 2

$\Pi= TR- TC$

8Q- ($Q^2+4Q+2)= 8\times2- (2^2+(4\times2)+2$

= 16-16= 0