Finding optimal production level
Suppose that a firm comes to you with the following
information:
P=1.5
TC=(1/70)q^2-(25/35)q+100
MC=(1/35)q-(25/35)
i.What is the total profit/loss if the firm stays in
business?
ii.What is the total profit/loss if the firm shuts down?
iii.Would you recommend that the firm stay in business or
shutdown? Why?
iv.Please graph (i) including the numbers.
Categories: