Assume that a firm has measured demand carefully and thinks that the following table accurately displays this. The total cost has been measured and can be given as TC = 20 + Q + Q2, where Q is the level of output. Complete the table and determine the profit-maximizing level of output.
OutputTotal RevenueTotal CostProfit1$ 90__________ 2160__________ 3210__________ 4240__________ 5250__________ 6240__________ 7210__________ 8160__________ 9 90__________ 10 0__________
What will be an ideal response?
As indicated in the table below, the profit maximizing level of output is Q = 5, where MR = MC = 10.
| Output | Total Revenue | Total Cost | Profit |
| 1 | $ 90 | $22 | $ 68 |
| 2 | 160 | 26 | 134 |
| 3 | 210 | 32 | 178 |
| 4 | 240 | 40 | 200 |
| 5 | 250 | 50 | 200 |
| 6 | 240 | 62 | 178 |
| 7 | 210 | 76 | 134 |
| 8 | 160 | 92 | 68 |
| 9 | 90 | 110 | - 20 |
| 10 | 0 | 130 | -130 |
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