Assume: {eq}TC = 5 + 2q + 0.5q^2, \ P = 20 - 3q {/eq}. What is the profit max price, {eq}q, TR, {/eq} cost?
Question:
Assume: {eq}TC = 5 + 2q + 0.5q^2, \ P = 20 - 3q {/eq}. What is the profit max price, {eq}q, TR, {/eq} cost?
Unconstrained Profit Maximization:
Unconstrained profit maximization is a microeconomics concept that firms use to fix prices, inputs and output that lead to greater profits. The firm uses its costs and revenue functions to fix output that will give huge profits. Most firms produce at a point where extra revenue gained as a result of selling the additional units of output is equal to the extra cost incurred as a result of producing that extra unit of output.
Answer and Explanation: 1
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View this answerProfit is maximized when its first partial derivative is equal to zero. Profit is the difference between the total revenue and the total cost:
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Profit Maximization: Definition, Equation & Theory
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