Question #330809

A firm operates in aperfectly competitive market . The market price of it's product is 4 birr and the total cost function is given by TC=1/3Q^3-5Q^2+20Q+50,Where TC is the total cost and Q is the level of output


A. What level of output should the firm produce to maximize it's profit ?


B. Determine the level of profit at equilibrium ?


C. What minimum price is required by the firm to stay in the market ?

1
Expert's answer
2022-04-19T09:58:52-0400

TC=13Q35Q2+20Q+50,TC=\frac 13Q^3-5Q^2+20Q+50,

TC=Q210Q+20,TC'=Q^2-10Q+20,

TC=2Q10,TC''=2Q-10,

TC=0,TC''=0,

Q=5,Q=5,

TC=5.TC'=-5.


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