In a production process, the cost structure indicates 40+3Q as the extra cost as a result of manufacturing an additional unit of output; while the component of cost regardless of the amount of output produced is $18. Given that the demand function is Qp = 600 – 3P in which Q represents quantity while P refers to price, (i) Express the total revenue function (TR) and the total cost function (TC) with respect to Q. (ii) Express the profit function (II) in terms of Q. (iii) Determine the level of output when the production is at the break-even point. (iv) Determine the profit-maximizing level of output and price.
In a production process, the cost structure indicates 40+3Q as the extra cost as a result of manufacturing an additional unit of output; while the component of cost regardless of the amount of output produced is $18. Given that the demand function is Qp = 600 – 3P in which Q represents quantity while P refers to price, (i) Express the total revenue function (TR) and the total cost function (TC) with respect to Q. (ii) Express the profit function (II) in terms of Q. (iii) Determine the level of output when the production is at the break-even point. (iv) Determine the profit-maximizing level of output and price.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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