13.4 A firm faces a demand curve given by q
100 2P.

Marginal and average costs for the firm are constant at $10 per unit.

a. What output level should the firm produce to maximize profits? What are profits at that output level?

b. What output level should the firm produce to maximize revenues? What are profits at that output level?

c. Suppose the firm wishes to maximize revenues subject to the constraint that it earn $12 in profits for each of the 64 machines it employs. What level of output should it produce?

d. Graph your results.