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What price-output combination is total profit maximized

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Reference no: EM133133618

Pharmed Caplets is an antibiotic product with monthly revenues and costs of: 

 

TR = 900Q - 0.1Q2

TC = 36,000 + 200Q + 0.4Q2

 

(a) Set up a spreadsheet (table) for output (Q), price (P), total revenue (TR), marginal revenue (MR), total cost (TC), marginal cost (MC), average cost (AC), total profit (π), and marginal profit (Mπ). Establish a range for Q from 0 to 1,000 in increments of 100 (i.e., 0, 100, 200, ..., 1,000).

 

(b) Based on your spreadsheet answer in part (a), at what price/output combination is total profit maximized? Why?

 

(c) Based on your spreadsheet answer in part (a), at what price/output combination is average cost minimized? Why? 

 

(d) At what price/output combination is total revenue maximized? Why?

Reference no: EM133133618

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