Question
Your company has estimated its total cost to be TC = 130,000 + 6Q + 0.007Q 2 ; its marginal cost is thus MC =
Your company has estimated its total cost to be TC = 130,000 + 6Q + 0.007Q2; its marginal cost is thus MC = 6 + 0.014Q, where Q is the quantity of units produced and TC is in dollars. Since your market is relatively competitive, your company is able to sell its output for $83 each (which thus yields MR = 83 and TR = 83Q). An eager intern at your company suggests that, since the company earns $83 revenue for each unit sold, then the company could make still more profit by selling more than the level chosen in part b; why would your companynot want to produce and sell more output than the level you chose in part b?
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