You are the manager of BTN D. In order to have a clear picture on how the firm operates and what is the total
demand by the consumer, you have performed a study by collecting some data from the market and estimated the following demand and cost functions:
Demand function : P = 225 – 2Q
Cost function : C(Q) = 1100 + 3Q2
i. Determine the price-quantity combination that maximises your firm’s profits.
ii. Calculate the maximum profits for the firm.
iii. Calculate the price-quantity combination that maximises your firm’s revenue.
iv. Calculate the maximum revenues for the firm.
v. Determine the quantity which minimise the average cost (AC) and compute the value of minimum AC.
vi. Does the firm achieve productive efficiency? Why?