Question
Tex has a small plant that produces storm windows. Its total revenue function is TR = 5.4Q, and the total cost function is TC =
Tex has a small plant that produces storm windows. Its total revenue function is TR = 5.4Q, and the total cost function is TC = 30 + 3Q + .03Q2. What is the profit-maximizing output for Tex? Show your work. MC = the first derivative of the total cost function or 3 + .06Q.
a. What is his selling price?
b. How much profit is he making?
c. Now assume that Tex has fixed costs of only 5. With this different information, answer the same three questions you just answered above. How have fixed-cost changes influenced Tex's production decisions?
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Canadian Cases In Financial Accounting
Authors: Carol E. Dilworth, Joan E. D. Conrod
2nd Edition
256111405, 978-0256111408
