For a particular perfectly competitive firm $S T C = 100 + 20 q + q ^ { 2 }$ and $S M C = 20 + 2 q$ , where q is output. If the market price is equal to 40, at what level of output should the firm operate to maximize profit in the short run?

Question

Quizplus · Accepted Answer

To maximize profit, set SMC equal to the market price: $20 + 2q = 40$. Solving for q gives $q = 10$.

For a Particular Perfectly Competitive Firm STC=100+20q+q2S T C = 100 + 20 q + q ^ { 2 }STC=100+20q+q2

For a Particular Perfectly Competitive Firm $S T C = 100 + 20 q + q ^ { 2 }$