Appendix 123

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Appendix Goolsbee1e_Solutions_Manual_Ch09_Calc.indd 123 Goolsbee1e_Solutions_Manual_Ch09_Calc.indd 123 11/15/12 3:09 PM 11/15/12 3:09 PM
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124 Part 3 Markets and Prices Solution : Q Q : Q *: 2 ) 2 3. Suppose that American Borax is a monopolist and that the worldwide demand for borax is Q= 100 where Qis tons of borax and Pis the price per ton. The total cost function for American Borax is TC= 10Q+ 0.5Q2.a. Write out the firm’s total revenue as a function of Qb. What is the profit function for American Borax?c. Find the firm’s profit-maximizing quantity by applying calculus to the profit function.d. Find American Borax’s profit-maximizing price and profit. P . P Q 2 ) 2 30 Goolsbee1e_Solutions_Manual_Ch09_Calc.indd 124 Goolsbee1e_Solutions_Manual_Ch09_Calc.indd 124 11/15/12 3:09 PM 11/15/12 3:09 PM
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Appendix: The Calculus of Profit Maximization Chapter 9 125 Solution Solution
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