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Consider the following total revenue (TR) and total cost (TC) relations where Q denotes output: TR = 1800Q + 0.006Q 2 TC = 12 100
Consider the following total revenue (TR) and total cost (TC) relations where Q denotes output:
TR = 1800Q + 0.006Q2
TC = 12 100 000 + 800 Q + 0.004 Q2
(a) Calculate output, marginal cost, average cost, price and profit at the average-cost minimizing level of output.
(b) Calculate output, marginal cost, average cost, price and profit at the profit-maximizing level of output.
(c) Compare and discuss your answers to parts (a) and (b).
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