Calculate the output level which maximizes profits

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Reference no: EM133552788

1. Defining Q to be the level of output produced and sold, assume that the firm's cost function is given by the following relationship:

TC = 100 + 2Q + 0.30Q²

Furthermore, assume that the demand for the output of the firm is a function of price P given by the following relationship:

Q = 24 - 0.5P

(a) Defining total profit as the difference between total revenue and total cost, express in terms of Q the total profit function of the firm.

(b) Determine the output level where total profits are maximized.

2. Suppose a firm assesses its profit function as:

p = -10 - 48Q + 15Q² - Q³

Calculate the output level which maximizes profits.

Reference no: EM133552788

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