Management has at its disposal the following information: Demand (price) function: P =32 –Q Total cost function: C(Q) = 200 +2Q. Using the above functions, determine the following: a. Profit maximizing output (quantity) b. Profit-maximizing price c. Maximum profit value d. Revenue-maximizing output. (quantity)
Management has at its disposal the following information: Demand (price) function: P =32 –Q Total cost function: C(Q) = 200 +2Q. Using the above functions, determine the following: a. Profit maximizing output (quantity) b. Profit-maximizing price c. Maximum profit value d. Revenue-maximizing output. (quantity)
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Example 2:
Management has at its disposal the following information:
Demand (
Total cost function: C(Q) = 200 +2Q.
Using the above functions, determine the following:
a. Profit maximizing output (quantity)
b. Profit-maximizing price
c. Maximum profit value
d. Revenue-maximizing output. (quantity)
Expert Solution
Step 1
Total revenue is the total receipts collected from the sale of goods and services in the market.
Total cost is the expenses incurred by the firm on the production of final goods and services. Firms hire factors of production for the production process.
The difference between total revenue and total cost is the profit.
The aim of any firm is to maximize the profit.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education