A firm has the following revenue and cost functions. TR = 120 Q – Q2 TC = 1/2 Q2 +30 Q + 10 Determine the quantity level at which the firm maximizes its total profit. (Hint: use marginal revenue = marginal cost rule)
Added by Henry K.
Step 1
The marginal revenue is the derivative of the total revenue function with respect to Q. The total revenue (TR) function is given as TR = 120Q - Q^2. So, the derivative of TR with respect to Q is MR = 120 - 2Q. Similarly, the marginal cost is the derivative of Show more…
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