A firm's total cost (TC) in thousand Naira is given by $TC = 0.5Q^{2} + 40Q + 200$ and its total revenue (TR) in thousand Naira is $TR = 120Q - Q^{2}$, where $Q$ is output in units. Determine the output level that maximizes profit and state the maximum profit.

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Accepted Answer

Output Q = 80/3 units; Maximum profit = 2600/3 thousand Naira (≈ 866.67 thousand Naira)

Neco Model Questions Vol1 2020 Economics Question 12

A firm's total cost (TC) in thousand Naira is given by \(TC = 0.5Q^{2} + 40Q + 200\) and its total revenue (TR) in thousand Naira is \(TR = 120Q - Q^{2}\), where \(Q\) is output in units. Determine the output level that maximizes profit and state the maximum profit.

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