Question
Assume that a competitive firm has the total cost function: TC= 1q^3 - 40q^2 + 770q +1700 Suppose the price of the firm's output (sold
Assume that a competitive firm has the total cost function:
TC= 1q^3 - 40q^2 + 770q +1700
Suppose the price of the firm's output (sold in integer units) is $600 per unit.
Using calculus and formulas to find a solution. how many integer units should the firm produce to maximize profit?
Please specify your answer as an integer.
Hint 1:The first derivative of the total cost function, which is cumulative, is the marginal cost function, which is incremental. The narrated lecture and formula summary explain how to compute the derivative.
Set the marginal cost equal to the marginal revenue (price in this case) to define an equation for the optimal quantity q.
Rearrange the equation to the quadratic form aq^2+ bq + c = 0, where a, b, and c are constants.
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