Consider the following information for a prfectly competitive firm during a one month time period. Assume that Q = the level of output and all costs are economic costs.
- Market price = $12.
- Total cost = 60 + 2Q + 0.5Q2
- Marginal cost = 3 + Q
At the profit-maximizing or loss-minimizing output level, economic profit would equal:
Hint: Solve for Q first. Remember, a firm maximizes profit producing a level of output where the last unit has a marginal revenue equal to its marginal cost.
Select one:
a. +$108
b. +$118.50
c. -$10.50
d. -$75