A firm’s total cost and marginal cost functions are: TC = 10 Q2 + 2 Q – 2 and MC = 20 Q + 2. Assume that the market price is 62 and that the marginal revenue (MR) is also 62 at all output levels. If the firm is currently producing 3 unit of output, what are profits for this firm?
a.
Profit is 92
b.
Profit 42
c.
Profit is 186
d.
None of the other choices
- A firm’s total cost and marginal cost functions are: TC = 10 Q2 + 2 Q – 2 and MC = 20 Q + 2. Assume that the market price is 62 and that the marginal revenue (MR) is also 62 at all output levels. What is the profit-maximizing output level?
a.2
b.3
c.4
d.None of the other choices
