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The demand function for a firms product is given by P = 60 Q. Fixed costs are 100, and the variable costs per good are
The demand function for a firms product is given by P = 60 Q. Fixed costs are 100, and the variable costs per good are Q + 6.
(a) Write down an expression for total revenue, TR, in terms of Q
(b) Write down an expression for total costs, TC, in terms of Q and deduce that the average cost function is given by
AC = Q + 6 + 100/Q
(c) Show that the profit function is given by = 2(2 Q)(Q 25)
State the values of Q for which the firm breaks even and determine the maximum profit.
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