4. If the cost function of Example 4 is changed to (a) Find the new marginal-cost function. C 20+ 15Q+ Q (b) Find the
4. If the cost function of Example 4 is changed to (a) Find the new marginal-cost function. C 20+ 15Q+ Q (b) Find the new equilibrium quantities. (Use fractions.) (c) Find the new equilibrium prices. (d) Verify that the second-order sufficient condition is met. 4. If the cost function of Example 4 is changed to (a) Find the new marginal-cost function. C 20+ 15Q+ Q (b) Find the new equilibrium quantities. (Use fractions.) (c) Find the new equilibrium prices. (d) Verify that the second-order sufficient condition is met.
Step by Step Solution
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Step: 1
Lets solve the problem stepbystep Problem 4 Cost Function Change The new cost function is given by C 20 15 Q Q 2 C 20 15 Q Q 2 a Find the new marginalcost function The marginal cost MC is the derivative of the total cost C with respect to the quantity Q Well find the derivative C 20 15 Q Q 2 C 20 15 Q Q 2 d C d Q 15 2 Q d C d Q 15 2 Q So the new marginal ...
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Authors: Robin Bade, Michael Parkin
8th edition
134492005, 978-0134492001
