Question: The known cost function for a company is C (Q) = 100 + Q2. If the
Question:
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
Social Media Marketing A Strategic Approach
ISBN: 978-0538480871
1st edition
Authors: Melissa Barker, Donald I. Barker, Nicholas F. Bormann, Krista E. Neher