Assume the following inverted demand function of a firm in the short run: P = 200 – 10Q . Now assume the total cost function of this firm is : TC = 200 + 320Q – 40Q2
The above cost function yields the MC function as 320 – 80Q
What is the profit maximizing price and quantity of this firm? What is the amount of short-run profit or loss? Explain fully. Show your work in this space.