3. A firm faces a demand curve given by the function: Q = 100 – 2P Marginal and average costs for the firm are constant at KShs.10 per unit. a) What output level should the firm produce to maximize...

3. A firm faces a demand curve given by the function: Q = 100 – 2P

Marginal and average costs for the firm are constant at KShs.10 per unit.

a) What output level should the firm produce to maximize profits and what are the profits at this output level?

b) What output level should the firm produce to maximize revenue and what are the profits at this revenue maximizing output level

c) Suppose the firm wishes to maximize revenues subject to the constraint that it earns KShs.12 in profits for each of the 64 machines it employs, what level of output should it produce?