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Answer

demand = 2q + p = 25

P = 25 - 2q

A) break even : Tr = Tc

Tr = P*Q

Tr = (25 - 2q) * q

Tr = 25q - 2q2

TC = Ac * Q

TC = (32/Q + 5 ) * Q

Tc = 32 + 5q

so tr = tc

25q - 2q^2 = 32 + 5q

25q - 2q^2 - (32 + 5q) = 0

25q - 2q^2 -32 - 5q = 0

20q - 2q^2 - 32 = 0

2q^2 + 20q - 32 = 0

Q^2 + 10q - 16 = 0

q^2 + 8q + 2q - (8)(2) = 0

q (q+8) + 2 (q + 8) = 0

(q + 8) ( q + 2) = 0

so value of Q is 2 and 8

B) Makes a loss of 432 units

will use same formula tr = tc

25q - 2q^2 = 32q + 5

so 2q^2 + 20q - 32 = -432

2q^2 + 20q - 32 + 432 = 0

2q^2 + 20q + 400 = 0

q^2 + 10q + 200 = 0

q^2 - 10q + 20q + (-10)(20) = 0

q ( q - 10) +20 (q - 10) = 0

(q-10) (q+20) = 0

so value of q after firms make loss of 432 units is

20.

C) maximizes profit : Mr = Mc

Mr = d(tr)/dq = 25q - 2q^2 = 25 + 4q

Mc = d(tc)/dq = 32 + 5q = 5q

so, 25 + 4q = 5q
25 = 5q - 4q

so , q = 25

the value of q = 25 maximizes the profit.

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