00:01
So here we're thinking about profit maximization and we have an inverse demand curve.
00:05
P is equal to 500 minus 5q.
00:07
We have a total cost curve of 50 plus 20 q plus q squared and that means we have a marginal cost of 20 plus 2 q.
00:20
Right.
00:21
So what i want to do is to set for a price is equal to marginal cost.
00:27
That's what competition means, right? competition sets price equal to marginal cost.
00:33
So here we get 500 minus 5q is equal to 20 plus 2q.
00:41
If i group like terms, i get 480, 480 is equal to 7q.
00:49
And i'm going to put that in my calculator.
00:52
Unfortunately, it does not divide evenly.
00:56
480 over 7.
00:58
We get q is equal to 68.
01:02
And that means the price is going to be 500 minus 5 outside of 68 .57.
01:09
Again, calculator question and i get with that 157 .14...