Question

Let, revenue function, TR=100Q-Q², cost function,TC= 50 + 6Q² a) Compute TR, TC and profit (π) at the output range of 0 to 10 units. b) Graph TR, TC and πand explain profit maximization goal of the firm.​

Answer 1

Hello,

a) To compute TR, TC, and profit (π) at the output range of 0 to 10 units, we can substitute the values of Q into the revenue and cost functions:

For TR: TR = 100Q - Q²
For TC: TC = 50 + 6Q²

Let's calculate TR, TC, and profit (π) for each value of Q from 0 to 10.

b) To graph TR, TC, and π, we can plot the values of TR, TC, and π on a graph with Q on the x-axis and TR, TC, and π on the y-axis. The profit maximization goal of the firm is to determine the output level at which profit (π) is maximized. This occurs when the difference between TR and TC is the greatest, indicating the highest level of profit. The firm aims to produce at this output level to maximize its profits.