A Numerical Example GI Iven P=$10 C(Q)=5+Q Optimal Price? P=$10 Optimal Output? MR=P=$10 and MC=2Q 10=2Q Q=5 units Maximum profits? PQ-C(Q=(10(5)-(5+25)=$20 Michael R Baye, Managerial Economics and Business Strategy, 3e. CThe McGraw-Hill Companies, Inc, 1999Michael R. Baye, Managerial Economics and Business Strategy, 3e. ©The McGraw-Hill Companies, Inc. , 1999 A Numerical Example • Given  P=$10  C(Q) = 5 + Q2 • Optimal Price?  P=$10 • Optimal Output?  MR = P = $10 and MC = 2Q  10 = 2Q  Q = 5 units • Maximum Profits?  PQ - C(Q) = (10)(5) - (5 + 25) = $20