Find the profit maximizing level of output for the firm/Managerial Economics
Suppose a firm sells in a highly competitive market where the going price is $15 per unit. Its cost equation is C = $25 + .25Q2.
A. Find the profit maximizing level of output for the firm. Determine its level of profit. Profit, = TR-TC = (PQ) C = 15Q 25 0.25Q2.
B. Suppose that fixed costs rise to $75. Verify this change does not affect the firm’s level of output.
