Answer to Question #97290 in Microeconomics for ABU

Question

Suppose that Total revenue of the firm is
TR = 5Q + 3Q2 and TC is TC = Q + 4Q2.
Obtain the quantity that maximizes profit and hence maximum profit.

Answer 1

$5+6Q=1+8Q$

$MC=TC'=1+4\times2Q=1+8Q$

$MR=TR'=5+3\times2Q=5+6Q$

$2Q=4$

$Q=2$

$Pr=TR-TC$

$Pr=5Q+3Q^2-Q-4Q^2=4Q-Q^2$

$Pr=4\times2-4$

$Pr=4$