The total cost functions for two soap manufacturers (Plane Soap and Round Soap) are given by equations
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Question:
The total cost functions for two soap manufacturers (Plane Soap and Round Soap) are given by equations
(i) and (ii) below,
(i) TC = 12 + 2Q
(ii) TC = 0.3Q3 -15Q2 + 250Q
(a) The demand function for both firms is P= 115 - 2Q. Determine the break-even points algebraically.
Plot total revenue and TC on the same diagram for each firm.
(b) Comment on the general characteristics of the TC functions.
(C) Determine the break-even points graphically and state the range of values of Q (output) for which
the firm makes a profit.
Comment on the profitability of both firms.
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