A Firm Has Total Cost Given by TC = Q³

question 14

Essay

A firm has total cost given by TC = q³ - 20q² + 200q + 576. Suppose the firm faces a marginal revenue curve given by P = 200.
i)What is the optimal quantity for this firm to produce?
ii)Calculate the firm's profit, fixed cost, and variable cost if it produces 12 units of output?
iii)What effect would each of the following have on MC?
a)The price of the variable input decreases.
b)The price of the fixed input increases.
c)A technological improvement increases the returns to scale of the production process.

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Definitions:

Pepsi

A carbonated soft drink produced and manufactured by PepsiCo, and one of the world's most famous and recognizable cola beverages.

Quantity

The quantity of a material or abstract item that is typically not measured in spatial terms.

Substitutes

Goods or services that can be used in place of one another, where the consumption of one increases when the price of the other increases.

Pork

Refers to the meat derived from domestic pigs, used for culinary purposes.