Firms maximize profit when the marginal revenue of the last unit produced equals the marginal cost of producing the good, and MC intersects MR from below. The shape of the marginal cost curve has little impact on the economic theory studied. As a result, we often assume that the firm's total costs equal $cQ, or marginal cost equals average cost, equals c, and is constant.

b. Find the profit-maximizing price and quantity when P = 25 - Q and the firm's marginal cost is constant and equal to $5 per unit.

How much profit does the firm earn? Calculate Consumer surplus as well.