Refer to Scenario 12.3. Suppose that the marginal cost falls such that: MC = Q - 10
What is the profit maximizing level of output?

A) 171.43
B) 120
C) 150
D) all of the above
E) none of the above

Question

Refer to Scenario 12.3. Suppose that the marginal cost falls such that: MC = Q - 10What is the profit maximizing level of output?A)  171.43B)  120C)  150D)  all of the aboveE)  none of the above

Taraivini Namositava · Accepted Answer

Final Answer : C, Explanation :  In order to find the profit maximizing level of output, we need to set marginal cost equal to marginal revenue. From Scenario 12.3, we know that the demand function is:P = 200 - 0.4QAnd, we know that total cost is:TC = 10Q + 500To find marginal revenue, we need to differentiate the demand function with respect to Q:MR = d/dQ (200 - 0.4Q) = -0.4Setting MR equal to MC, we get:-0.4 = Q - 10Solving for Q, we get:Q = 150Therefore, the profit maximizing level of output is 150 units.

Refer to Scenario 12.3. Suppose that the marginal cost falls such that: MC = Q - 10
What is the profit maximizing level of output?

A) 171.43
B) 120
C) 150
D) all of the above
E) none of the above

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