# Answer to Question #58191 in Microeconomics for Chanda

Question #58191

Assume the current price of maize K70 per 100 kg and the short run cost function, where Q represents bags of maize per year is:

TC = 800 + 16Q - Q2

a) What is the profit maximizing output?

TC = 800 + 16Q - Q2

a) What is the profit maximizing output?

Expert's answer

The conditions seems inconsistent with the reality: that is, the Total Cost function becomes negative when Q becomes more than 37:

TC (0) = 800 + 16 * 0 - (0 * 0) = 800

TC (38) = 800 + 16 * 38 - (38 * 38) = -36

...

TC (100) = 800 + 16 * 100 - (100 * 100) = - 7600

which means that the cost become "revenue", in fact. Formally, based on the conditions, the answer would be infinity, which is obviously impossible.

TC (0) = 800 + 16 * 0 - (0 * 0) = 800

TC (38) = 800 + 16 * 38 - (38 * 38) = -36

...

TC (100) = 800 + 16 * 100 - (100 * 100) = - 7600

which means that the cost become "revenue", in fact. Formally, based on the conditions, the answer would be infinity, which is obviously impossible.

Need a fast expert's response?

Submit orderand get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

## Comments

## Leave a comment