Complete all true or false questions Firms maximize profits where MR=MC. MR= dTR/dQ , MC= dTC/dQ...

Complete all true or false questions

Firms maximize profits where MR=MC. MR= dTR/dQ , MC= dTC/dQ Using the following Total Revenue and Cost functions to answer the following questions.

TR= 50Q TC=10Q^2 - 50Q +100

_____ (1) Marginal Revenue is $50 and is constant over all Q.

_____ (2) Profits are maximized at a Q more than 20.

_____ (3) The total cost function is in the form of a quadratic function.

_____ (4) Marginal Cost is: MC= 20Q-100

_____ (5) Profits (TR-TC) at the maximum is greater than $280.

Expert Solution

TR= 50Q

TC = 10Q^² - 50Q +100

Option A is correct as first derivative of TR with respect to Q is 50

Profit is maximized when MR = MC where MR = 50 and MC = 20Q - 50. At profit maximizing output, 20Q - 50 = 50 and Q = 5 which make this statement incorrect.

Option C is correct as it is a quadratic equation.

Option D is incorrect because MC = 20Q - 50

At output level of 5, TR = 250 and TC = 100 which result in profit of 150 and make this statement incorrect.

Rahul Sunny answered 2 years ago

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