A company produces bags and has the following short-run cost function:

() = 250 + 44 + .48!

a. At what quantity is cost minimized?

b. What is the average fixed cost and the average marginal cost at this cost-minimizing quantity?

c. Wages for this company are $20. At the cost-minimizing quantity, what is the "?

d. Assume that the firm faces the following demand curve.

= 50 0.2

What is the profit maximizing quantity? What is the profit the firm earns at this quantity? What is the optimal

short-run strategy?

e. What is the optimal long-run strategy, assuming demand conditions do not change?