Q- A firm’s short-run cost function for the production of gizmos is given by the following...

Q- A firm’s short-run cost function for the production of gizmos is given by the following expression: C(y) = 10y2 + 200y + 100 000. Draw the cost function C(y) and calculate;
A- Calculate the range of output over which it would be profitable for this firm to produce gizmos if it can sell each gizmo for $2400. Calculate the value of the output that maximizes this profit. Calculate the value of maximum profit
B- Repeat these calculations and explain your results for the case in which the short-run cost function is given by C(y) = 10y2 + 200y + 200 000

Expert Solution

Find the Profit function by subtracting, Total Revenue from total cost and solve for Profit greater than zero and for maximization, Differentiate the Profit function with respect to output and equate it to zero.

Rahul Sunny answered 1 year ago

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