Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by Cequals400plus2q squared, where q is the level of output and C is total cost. (The marginal cost of production, MC (q ), is 4q; the fixed cost, FC, is $400). If the price of a watch is $80, how many watches should you produce to maximize profits?

The quantity to maximize profit = 20 units

Explanation:

In a perfectly competitive market , profit is maximized at the quantity where the marginal cost is equal to marginal revenue.

Note that the MC is the change in  total cost as a result of a change in total production unit by a unit

Marginal revenue is the change in total revenue as a result of selling additional unit of product. For a perfectly competitive it is equal to the selling price.

To maximize profit , MR = MC

MC- 4q  MR- 80

4q = 80

q = 80/4 = 20

The quantity to maximize profit = 20 units

the specific actions take by the fed. what the fed was attempting to do by taking these actions. the result of the actions taken by the fed

answer; risk transference;