Assume perfect competition: Price: $38 Cost: TC=20Q+.04Q2 TC=20Q+.04Q2 Solve for the profit-maximizing Quantity produced by an...

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Assume perfect competition: Price: $38 Cost: TC=20Q+.04Q2 TC=20Q+.04Q2 Solve for the profit-maximizing Quantity produced by an...

Assume perfect competition:

Price: $38

Cost: TC=20Q+.04Q2

TC=20Q+.04Q2

Solve for the profit-maximizing Quantity produced by an individual firm in the short run.

business economics

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Answer 1

Answer #1

TC = 20Q + 0.04Q²

MC = 20 + 0.08Q

P = 38

The profit maximization condition is:

MC = P

20 + 0.08Q = 38

0.08Q = 38 - 20 = 18

Q = 18 / 0.08 = 225

Thus, the profit-maximizing Quantity produced by an individual firm is 225.

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Answer 2

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