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TR = 21Q –Q 2 TC = 1/3Q 3 – 3Q 2 + 9Q + 6 a.At what Q is TR maximized? b.How do you know this is a maximum c.At what Q is profit maximized? d.Prove this.

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Presentation on theme: "TR = 21Q –Q 2 TC = 1/3Q 3 – 3Q 2 + 9Q + 6 a.At what Q is TR maximized? b.How do you know this is a maximum c.At what Q is profit maximized? d.Prove this."— Presentation transcript:

1 TR = 21Q –Q 2 TC = 1/3Q 3 – 3Q 2 + 9Q + 6 a.At what Q is TR maximized? b.How do you know this is a maximum c.At what Q is profit maximized? d.Prove this is a maximum. e.What is the maximum profit?

2 A) At what Q is profit maximized? B) Prove this is a maximum. C) What is the total profit? TR = 50Q – Q 2 TC = 100 – 4Q + 2Q 2

3 Demand curve is Q = 220 – P TC = Q – 3Q 2 + 1/3Q 3 A) Write the equation for Total Revenue. B) Determine the output level and price that will maximize profit/minimize loss. C) What is the profit/loss at this point?

4 A) What is the dollar value of average fixed cost at an output of 25 units? B) At what level will marginal cost be minimized? C) Prove this is a minimum. D) At what level will AVC be minimized? E) Prove this is a minimum. Short run Total Cost STC = Q – 1.5Q Q 3

5 Demand function Q = 350 – 0.25P STC = Q – 9Q 2 + 1/3Q 3 Determine the profit maximizing quantity sold and the price. Prove this is a maximum. What is the level of profit?

6 Demand Q = 75 – 0.5P STC = Q – 3Q 2 + 1/3Q 3 Find the MR equation for the firm. Solve for the profit maximizing quantity and price.


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