A firms profit function is (q) = R(q) - C(q) = 120q - (200 + 40q +

A firm’s profit function is π(q) = R(q) - C(q)

= 120q - (200 + 40q + 10q2). What is the positive output level that maximizes the firm’s profit

(or minimizes its loss)? What is the firm’s revenue, variable cost, and profit? Should it operate or shut down in the short run?

3. Competition in the Short Run