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. if the market price is $30, what is firm's profit-maximizing output level and what is the amount of its total variable cost at this level of output?
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25 votes
25 votes
. if the market price is $30, what is firm's profit-maximizing output level and what is the amount of its total variable cost at this level of output?

User Sivaramakrishnan
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1 Answer

13 votes
13 votes

Suppose y are no of units firm is producing and c is the cost of unit y.

Max Profit=Total revenue-Total Cost

Max Profit=(no of units)(price)-(no of units)(cost)

=30y-cy

Taking derivative with respect to y

Max profit=30

Total Variable Costs = Cost Per Unit x Total Number of Units

Cost per unit is c and total units are y so

Total Variable Costs=cy

User EyalG
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