The total revenue curve of a firm is R(q) = 40q 12q 2 and its average
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Question:
The total revenue curve of a firm is R(q) = 40q − 12q2 and its average cost A(q) = 1/30q2 − 12.85q + 20 + 400/q ,where q is the firms output.
i. Derive an expression C(q) for the firms total cost function.
ii. Derive an expression Π(q) for the firms profit function.
iii. Is the rate of change of profit increasing or decreasing when the ouput level of the firm is 10 units?
iv. Determine the level of output for which the firms profit is maximized.
v. What is the firmss maximum profit?
Related Book For
Taxes and Business Strategy A Planning Approach
ISBN: 9780132752671
5th edition
Authors: Myron Scholes, Mark Wolfson, Merle Erickson, Michelle Hanlon
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