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Profit Maximizing Equilibrium Output


A firm produces output at a cost of: C = 50 + 20 X and sells it at a price of P = 220 - 4 X

1. Determine the profit maximizing equilibrium output, price and the total profit under two conditions:
1.1 A firm is a monopolist (15)
1.2 A firm under perfect competition (15)

See attached file for full problem description.

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Solution Preview

You are making the problem much more difficult than it really is. If you're like me, math isn't your thing and calculus wasn't your favorite subject. But once you see how it simplifies problems like these, you will love it.

Marginal cost can be found by taking the differential of the cost ...