Question

i need help solving part 1 and 2

TEXAS A&M INTERNATIONAL UNIVERSITY A.R. SANCHEZ, Jr. SCHOOL OF BUSINESS Course: ECO 3320-260 Managerial Economics - SPRING 2020 Instructor: Dr CONSTANT YAYI. Due date: Feb 4, 2020 at the beginning of class. Chapter 1 In-class activity 1.2 An engineering firm recently conducted a study to determine its benefit (total revenue) and cost structure (total cost). The results of the study are as follows: The total revenue from producing q units is TR(q) = 5,000 - 10q? so that its marginal revenue is MR(q) = 5,000 - 200 and the total cost of producing q units is TC(q) = 100,000 + 15qso that its marginal cost is MC(q) = 309 Part A 1. Find the level of output q' that yields the maximum profit. 2. Find the maximum profit achieved by the firm at the output level q.

Answer 1

MR = d(TR)/dq = 5000-20q

MR = MC at profit maximization.

5000 - 20q = 30q

q*=  100

2. Maximum profit = TR - TC

= 5000*100 - 10(100)^2 - 100000 - 15(100)^2

= 150000