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7. (12 marks) Suppose that a rm can sell a quantity (1 at a price of 100 211. The rm's costs are given by C(q)
7. (12 marks) Suppose that a rm can sell a quantity (1 at a price of 100 211. The rm's costs are given by C(q) = q3 + 2g2 + F for some F > 0. The constant F is a xed cost that only needs to be paid if the rm opens its doors (think of this as registering the rm, buying land for production, etc.). If the rm does not open its doors, it earns O prots. a) (6 marks) Suppose that the rm has chosen to open its doors. What is the level of g which maximizes prots? b) (6 marks) For what values of F should the rm open its doors? In other words, for what values of F will the rm earn positive prots given the solution to part a)
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