Answer to Question #155296 in Economics for Gigi

Question

In a perfect competitive market the price of the commodity is 3 per unit of total output.the total cost function of a firm is given c =(1/3) - 4q2+ 10 q + 10.

Find the profit maximization output and total profit

Answer 1

$$TC=\frac{1}{3}-4q^2+10q+10$$

$$MC=-8q+10$$

$$TR=3q$$

$$MR=3$$

$$MR=MC$$

$$-8q+10=3$$

$$q=0.875$$

$$\pi=TR-TC=4q^2-7q-10\frac{1}{3}$$

$$\pi=-13.4$$