P2.6 Profit Maximization: Equations. Rochester Instruments, Inc., operates in the highly com-… 1 answer below »

P2.6 Profit Maximization: Equations. Rochester Instruments, Inc., operates in the highly com- petitive electronics industry. Prices for its RII-X control switches are stable at $50 each. This means that P = MR = $50 in this market. Engineering estimates indicate that relevant total and marginal cost relations for the RII-X model are

 

TC  =  $78,000  +  $18Q  +  $0.002Q2:

MC  =  DTC/DQ  =  $18  +  $0.004Q

 

A.   Calculate the output level that will maximize RII-X profit.

B.    Calculate this maximum profit.

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