Your company has estimated its total cost to be
TC=8,000+3Q+0.004Q
2
TC=8,000+3Q+0.004Q2
so its marginal cost is thus
MC=3+0.008Q
MC=3+0.008Q
where Q
Q is the quantity of units produced and TC
TC is in dollars. Since your market is relatively competitive, your company is able to sell its output for $55 each, which thus yields
MR=55
MR=55
and
TR=55Q
What is the optimal level of output for your company to produce/sell?
Answer:
What is the marginal revenue from the last unit sold?
Answer: