Given the following total revenue (TR) and total cost (TC) functions for a firm, write down the firm’s profit function. Determine the level of output the firm should produce in order to maximize profits by using the first-order condition. Confirm that this quantity represents maximum profits by using the second-order condition. TR=4000Q−33Q2 TC=2Q3−3Q2 +400Q+5000
Given the following total revenue (TR) and total cost (TC) functions for a firm, write down the firm’s profit function. Determine the level of output the firm should produce in order to maximize profits by using the first-order condition. Confirm that this quantity represents maximum profits by using the second-order condition. TR=4000Q−33Q2 TC=2Q3−3Q2 +400Q+5000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Given the following total revenue (TR) and total cost (TC) functions for a firm, write down the firm’s profit function. Determine the level of output the firm should produce in order to maximize profits by using the first-order condition. Confirm that this quantity represents maximum profits by using the second-order condition.
TR=4000Q−33Q2
TC=2Q3−3Q2 +400Q+5000
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