Total Revenue & Total Cost
Cost Curves & Profit Maximization
📈 Market Price
Price (P) $15.00
P = MR = AR (price taker)
Cost Structure
Fixed Cost (FC) $30
Linear Cost (a) $2.00
Quadratic (b) 0.10
Cubic (c) - Curvature 0.020
TC = FC + aQ + bQ² + cQ³
MC = a + 2bQ + 3cQ²
Optimal Decision
Optimal Q* 10.0
Total Revenue $150
Total Cost $80
ATC at Q* $8.00
AVC at Q* $5.00
MC at Q* $15.00
Economic Profit
$70.00
Decision: PRODUCE — Price exceeds ATC. Firm earns economic profit!
Legend
Price / MR
MC (Marginal Cost)
ATC (Avg Total Cost)
AVC (Avg Variable Cost)
Profit Max (MR=MC)