Production and profit decisions of firm

Reference no: EM1316841

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

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

Reference no: EM1316841

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