Mathematics

Mathematics

Problem

A firm faces the price–demand relation p(q)=90−qp(q)=90-q dollars per unit and incurs a cost of C(q)=15q+200C(q)=15q+200 dollars to produce qq units. A per-unit tax of \10isimposedonthefirm,effectivelyincreasingitscostby10 is imposed on the firm, effectively increasing its cost by 10 for each unit sold. At what production level should the firm now operate to maximize profit? a) q=37.5q=37.5 b) q=42.5q=42.5 c) q=32.5q=32.5 d) q=35q=35

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