# Answer to Question #33474 in Microeconomics for Susan

Question #33474

What is the short-run profit maximizing level of output for a firm with short-run total cost given by TC = 50 + 2q + 2q^2 that operates in a perfectly competitive industry where the short-run market demand and supply curves are given by QD = 1410 – 40P and QS = -390 + 20P?

Answer

a.

1800

b.

1130

c.

7

d.

30

Answer

a.

1800

b.

1130

c.

7

d.

30

Expert's answer

TC = 50 + 2q + 2q^2

QD = 1410 – 40P

QS = -390 + 20P

Answer:

Qd = Qs, so

1410 - 40P = -390 + 20P

60P = 1800

P = 30,

Q = 1410 - 40*30 = 210

For profit maximization MR = MC = P = 30

MC = TC' = 4Q + 2 = 30

4Q = 28

Q = 7

So, the short-run profit maximizing level of output for a firm is 7 units.

Right answer:

c. 7

QD = 1410 – 40P

QS = -390 + 20P

Answer:

Qd = Qs, so

1410 - 40P = -390 + 20P

60P = 1800

P = 30,

Q = 1410 - 40*30 = 210

For profit maximization MR = MC = P = 30

MC = TC' = 4Q + 2 = 30

4Q = 28

Q = 7

So, the short-run profit maximizing level of output for a firm is 7 units.

Right answer:

c. 7

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