Cost minimization and profit maximization are two sides of t

\"Cost minimization and profit maximization are two sides of the same coin.” Discuss in the light of your personal observation as a rational person or firsthand experience as a manager.

Derive marginal cost function from the given total cost function is follows:

TC = 2000 +10Q+2Q2+.5Q3

Solution

Cost minimization and profit maximization are two sides of the same coin as we know that lower cost will result in higher profits keeping other things constant. This happens when there is fixed output in the short run and profits can not be led by the change in revenues any more , so in that case if the firm can contain some of the variable costs through operating effectiveness then lower costs will result in increase in profit.

I will tell you the example of Al othaim company a saudi based grocery store that is likely to see no change in profits due to stabe revenues and it sources inventory from various supplier point that is bit costly due to higher costs of freight and carrying goods over network. Now the company opens a warehouse in a key location that is able to maintain inventory and supplies goods to all branches at less fuel costs that means lower costs and higher profits while top-line is same.

2)

MC = 10+4Q+15Q^2