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The cost and the revenue functions of a profit maximizing firm are \(C=Q^3-59Q^2+1315Q+2000\) and…

The profit-maximizing output is 35 units. Profit is \(\pi\) \(=R-C\) \(=-Q^3+57Q^2-315Q-2000\), so \(d\pi/dQ\) \(=-3Q^2+114Q-315\) \(=-3(Q-3)(Q-35)\). The stationary outputs…

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The cost and the revenue functions of a profit maximizing firm are
C=Q3−59Q2+1315Q+2000C=Q^3-59Q^2+1315Q+2000 and
R=1000Q−2Q2R=1000Q-2Q^2 respectively. The profit maximizing level of output of the firm will be

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Correct answer D

The profit-maximizing output is 35 units. Profit is π\pi =R−C=R-C =−Q3+57Q2−315Q−2000=-Q^3+57Q^2-315Q-2000, so dπ/dQd\pi/dQ =−3Q2+114Q−315=-3Q^2+114Q-315 =−3(Q−3)(Q−35)=-3(Q-3)(Q-35). The stationary outputs are 3 and 35, and d2π/dQ2=−6Q+114d^2\pi/dQ^2=-6Q+114 is negative at 35 and positive at 3. Profit at 35 is 13,925, exceeding profit of -2,000 at zero output.

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