Find firm profit-maximizing price and quantity

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Reference no: EM1370755

Q. firm uses a single plant with costs C= 160 +16Q +.1Q2 and faces price equation P= 96 - .4Q.

a) Find firm's profit-maximizing price and quantity. Illustrate what is profit?

b) firm's production manager claims that firm's average cost of production is minimized at an output of 40 units. Furthermore, she claims that 40 units is firm's profit-maximizing level of output. Explain where these claims are correct.

c) Could firm increase its profit by using a second plant (with costs identical to first) to produce output in part (a)? Explain.

Reference no: EM1370755

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