Question: Question: The known cost function for a company is C (Q) = 100 + Q2. If the company sells its output in a perfectly competitive

Question:

The known cost function for a company is C (Q) = 100 + Q2.

If the company sells its output in a perfectly competitive market and another company in the industry sells its output at $ 10

a. At what level of output should the company produce to maximize profits or minimize losses?

b. What is the profit or loss level if the company makes an optimal decision?

Guide:
The maximum profit requirement is MR = MC
The perfectly competitive market is MR = P, and looking for MC is obtained from TC derivatives
From MR = MC, Q value is obtained
Then, look for the AVC value with the TVC / Q formula
Compare the Q value and the AVC value, which is greater to determine the company's strategy going forward
Calculating Profit = TR - TC

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