Given Demand and Cost Functions Find level of output and price that maximizes Total Revenue

In this video we will try to solve a question on the revenue maximization of a firm. .we are given a demand function at a cost function and we were told to find the level of output and price which maximizes the total revenue.
The goal of the firm is to maximise profit. Therefore, the firm would be in equilibrium only when it achieves profit maximisation. The total revenue (TR) function of the firm gives its total revenue as a function of the quantity of output sold (q), i.e., TR = TR(q).

The total cost (TC) function of the firm, on the other hand, gives us total cost as a function of the quantity of output produced (q), i.e., TC = TC(q).

There are two conditions for profit maximization
FIRST ORDER CONDITION
That is, if the firm is to obtain maximum profit, it would have to equate its MR and MC, or, it would have to remain at the point of intersection between its MR and MC curves.

SECOND ORDER CONDITION
The first order or the necessary condition for maximum profit is also the first order or the necessary condition for minimum profit. That is why there should be an additional condition that should be satisfied along with the FOC. This condition is called the second order condition (SOC) or the sufficient condition for profit maximisation.
according to the SOC for maximum profit under perfect competition, the firm’s MC curve should be upward sloping towards right at the MR = MC point (where the FOC for maximum profit has been satisfied)

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[Achola_Akoth]

Thank you so much....Am literally here and have an exams at 8..And can confidently say am good to go😊😊❤️

[rawrk]

YOUR VIDEOS ARE REALLY HELPING TO PREPARE FOR TOMORROW EXAM- THANKYOU SO MUCH MAY ALLAH BLESS U💗

[lmatube]

It is the Best concept of Microeconomics
Thank you for your contribution!

[darmukhtar]

Thank you for such wonderful explanation

[immenselyharsh]

great work sir, please keep posting this type of problems, it just brushes numerical solving.

[Aesthetic-osgd]

Sir you should also make playlist on macro economics.

[gulammohd]

Great way of explaining complex things into simpler one

[danielmwale]

Good job, this is an eye opener for me

[siomaihihi]

Im confused especially in the factoring/solving quadratic equation part. can you explain further sir?

[brandinakaisala]

Thank you for your help

Is Total revenue maximizing the same as profit maximizing??

[Annie]

Do you have any video on when two firms have arrangement to collaborate by making decisions of production level together and how to determine the price and profit?

[alexwulugee]

Thanks!! Does this mean AC is the same as TC?
What would graph of demand function be given Qd=-30p +0.05y +2Pr +4T when Y is 5000; Pr is 25; and T is 30

[mirriamsakala]

Very helpful thank you
How do you calculate profit from such a question ?

[ishasah]

sir, is this same as profit maximization?

[emmanuelsarpong]

I learnt for maximization the value should be less than 0 eg. -4<0
Here is the case after inserting 1 we had -10 i.e <0 which should be the maximizing point and after inserting 4 we had 9 i.e>0 which should be the minimum point
But he’s saying it vice versa here
Can someone pls clarify it for me 😌🤲🏻

[alexwulugee]

Thanks, but could you help with this?
Given a firm demand function Q-90+2p=0 and it's average cost function AC=Q2 -8Q+57+2/Q find the level of output which maximize total revenue

[kamalsaid]

K=Q-Q²+Q³ k=capital Q=output derive supply curve when wk=1

[ukpenignatiusigbawase]

Please Sir, could you help solve problem for me, this is two weeks with it, yet no understanding.
A firm's average cost function is given by Y=x²-20x+120 where Y is average cost in naira per unit of output and output price is N10 and is same at all levels.
1. Find the output levels at which the firm breaks even(i.e price=average cost)
2. Graph the cost function and show solution
3. Find a range of prices over which the firm makes across at all levels of output

[leonardhakizimana]

Why MC is a horizontal line while it’s equation looks like is not?

[elianquachelie]

I think what you are finding sir is the level output that maximizes profit rather than total revenue because at profit maximization MR=MC