Question: Assume that a competitive firm has the total cost function: TC= 1q^3 - 40q^2 + 770q +1700 Suppose the price of the firm's output (sold

Assume that a competitive firm has the total cost function:

TC= 1q^3 - 40q^2 + 770q +1700

Suppose the price of the firm's output (sold in integer units) is $600 per unit.

Using calculus and formulas to find a solution. how many integer units should the firm produce to maximize profit?

Please specify your answer as an integer.

Hint 1:The first derivative of the total cost function, which is cumulative, is the marginal cost function, which is incremental. The narrated lecture and formula summary explain how to compute the derivative.

Set the marginal cost equal to the marginal revenue (price in this case) to define an equation for the optimal quantity q.

Rearrange the equation to the quadratic form aq^2+ bq + c = 0, where a, b, and c are constants.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!