Estimate the maximum revenue and marginal costs, Microeconomics

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The market demand function of a firm is given by

4P + Q - 16 = 0

And the AC function takes the form

AC = 4/Q + 2 - 0.3Q + 0.05Q2

Find the Q which gives:

(a)  Maximum revenue

(b)  Minimum marginal costs,

(c)  Maximum profit

Use the second derivative test in each case.

 

 


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