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…
Choose your answer
The cost and the revenue functions of a profit maximizing firm are
and
respectively. The profit maximizing level of output of the firm will be
Answer and explanation
Correct answer D
The profit-maximizing output is 35 units. Profit is , so . The stationary outputs are 3 and 35, and 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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West Bengal SET (WB SET)