Answer:
Profit Function = P.Q - [A + C (Q)]
Explanation:
Profit = Total Revenue - Total Cost
Let Q be the quantity
Total Revenue = Price x Quantity = P X Q
Total Cost = Total Fixed Cost + Total Variable Cost
= A + C (Q) ;
where A = Autonomous fixed cost, irrespective of level of output , C (Q) is functional form of variable cost in terms of Quantity of production
Profit = P.Q - [A + C (Q)]
Letting : P = 10, C = 2Q , Q = 3 , A = 2
Profit would be : P.Q - [A + C (Q)]
= (10)X(3) - [ 2 + 2(3)]
= 30 - (2 + 6) = 30 - 8
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