Suppose firm A’s total cost function is given by c(q) = 3q^2 + 95. If the equilibrium price is $24, what is the profit maximizing quantity of output? (a) 4 units (b) 2 units (c) 0 units (d) 6 units (e) 10 units

Suppose firm A’s total cost function is given by c(q) = 3q^2 + 95. If the equilibrium price is $24, what is the profit maximizing quantity of output? (a) 4 units (b) 2 units (c) 0 units (d) 6 units (e) 10 units

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.4P

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Question

Suppose firm A’s total cost function is given by c(q) = 3q^2 + 95. If the equilibrium price is $24, what is the profit maximizing quantity of output?

(a) 4 units

(b) 2 units

(d) 6 units

(e) 10 units

Definition Video Definition Point where the demand and supply curves intersect. At the equilibrium price the quantity supplied of a good is equal to the quantity demanded. When the market is not in equilibrium, market surplus or market shortage occurs. The region that is above the price equilibrium indicates market surplus and the region below the price equilibrium indicates market shortage. Video

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