Question
A firm produces q tons of chemicals that they sale a price p = 100 per ton. The total cost function is given by: T
A firm produces q tons of chemicals that they sale a price p = 100 per ton. The total cost function is given by:
T C = 100 + 0.1q3 0.2q2
Write down the profit function
Derive the marginal profit function. How do you interpret
this function?
For what value of q is the marginal profit 0? Would it make
sense for a company to produce more than this quantity?
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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
