Babydrink is a profit-mazimizing monopolist that produces infant formula. The demand curve facing the firm is given by P=a-bQ,where both a and b are positive parameters.This firm's total cost function is linear in quantity with constant marginal cost c per unit of output and fixed costs of F.
Determine this firm's profit function.
- 小金人Lv 41 decade agoFavorite Answer
MR ︰P = a - 2bQ
MR = MC，a - 2bQ = c → Q = ( a - c ) / 2b
利潤π= TR - TC = P × Q - F - cQ = ( a - bQ )Q - F - cQ
= aQ - bQ^2 - F - cQ = ( a - c )Q - bQ^2 - F
=( a - c ) × ( a - c ) / 2b - b × ( a - c ) / 2b - F
= [( a - c )^2 - b( a - c )] / 2b - FSource(s): ME