How to maximize short-run profits

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Reference no: EM13178663

Mary's Fence Post Factory faces a perfectly elastic demand curve for fence posts at a price of $39 per post. Let Q represent the number of fence posts that Mary makes. Mary's total cost and marginal cost curves for making fence posts are:

TC = 4,000 + 3Q + 0.1Q^2

MC = 3 + 0.2Q

Graph Mary's marginal cost curve using the orange line (square points) and her marginal revenue curve using the blue line (circle points). Place a green point (triangle symbol) at the price and quantity at which Mary would maximize short-run profits.

The graph has a price of 0 -50 on the y-axis and quantity 0-200 for the x-axis.

Reference no: EM13178663

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