Giant Screen TV, Inc., is a Miami-based importer and distributor of 60-inch screen HDTVs for residential and commercial customers. Revenue and cost relations are as follows:
TR = $1,800Q - $0.006Q2
MR = ∂TR/∂Q = $1,800 - $0.012Q
TC = $12,100,000 + $800Q + $0.004Q2
MC = ∂TC/∂Q = $800 + $0.008Q
A. Calculate output, marginal cost, average cost, price, and profit at the average cost-minimizing activity level.
B. Calculate these values at the profit-maximizing activity level.
C. Compare and discuss your answers to parts A and B.