Explain how should firm produce in order to maximize profit

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Reference no: EM1371421

Q. following is a demand function that has been approximated for a monopolistically competitive
firm. (30 pts)
Q = 320 - 2P
If firm's TVC function is
TVC = 40Q - 1.5Q2 +1/3 Q3
Total fixed cost = $500

a. Explain how much should firm produce in order to maximize profit?

b. Illustrate what is maximum profit that firm can generate at output level (your answer in a)?

Reference no: EM1371421

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