Question

If a firm’s cost function is C(q) = 65 + 35q + q2.

What level of output, q, should it choose to maximize its profit if the market price is p? How much

does it produce and what is its revenue, cost of production, and profit if p = 215 dinars?

Answer 1

$C=65+35q+q^2,$

$C'=35+2q,$

$C'=0,$

$q=-17.5,$

$C=-241.25.$

$C(215)=53815,$

$C'(215)=465.$