Solving a Numerical or Profit Maximization in Perfect Competition
Cognition and Cognitive Processes
August 15, 2017I am having problems trying to find resources for the following statement. Please help me. The statement is as follows:
August 15, 2017Solving a Numerical or Profit Maximization in Perfect Competition
Introduction: Firm PQR produces a product ‘Alpha’ under perfect competition market conditions. The cost function for the firm is:
TC = 1500 + 200 Q + Q2
The market supply and demand equations for the product ‘Alpha’ in the perfect competition market are:
QS = 40,000 + 60 P
QD = 80,000 40 P
Task: Based on the information given above, calculate:
a. The profit maximizing output for PQR.
b. The economic profits earned by PQR.
c. Is the industry for product ‘Alpha’ in equilibrium?
Please provide a step-by-step calculation to show how you arrived at the answer.
