True or false Explain Mr O Carr has the cost function cy y2

True or false? Explain. Mr. O. Carr has the cost function c(y) = y^2 + 100 if his output, y, is positive and c(0) = 0. If the price of output is 18, Mr. Carr’s profit-maximizing output is zero.

Solution

False

C (y) = y^2 + 100

Marginal Cost (differentiating for y)= y

Marginal revenue = 18

For profit maximization

MR = MC

y = 18

hence profit is maximum at quantity 18.