1. Assume a perfectly competitive market. Let C = Q³ - 4Q² + 4Q be the

cost function of a hypothetical rm. Find its supply function and specify

the price and quantity at its lowest point.

2. Assume a perfectly competitive market. Let the your rm's xed cost is

10 and the market price is 3. When you produce 3, the marginal and the

variable costs are 3 and 6, respectively. How much will you produce in order

to maximize the prot or minimize the loss?

(Use this for questions 3 and 4) Let Q denote the quantity of pizza. A

pizza producer has variable cost (VC) and xed cost (FC) as

V C = Q²

FC = 4:

3. Assume a perfectly competitive market. What happens if the market price

is $3? Decide whether to produce or not. If you produce, how many? For

your decision, how much is the prot or loss?

4. Assume a monopoly. Along with the VC and FC given above, you nd that

the market demand function is

P=-Q+40