Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Consider a firm in a competitive market that has the cost function C(q) = 64q 2 , where q is the output quantity that the

Consider a firm in a competitive market that has the cost function C(q) = 64q2 , where q is the output quantity that the firm produces.

(A) Determine average costs, marginal costs, variable costs and fixed costs.

(B) Calculate the minimum of the average cost function.

(C) Suppose the firm faces price p = 128. Determine the firm's optimal output quantity and its profit at this quantity.

(D) Suppose the firm faces price p = 1. What is the profit if the firm produces q = 0? Is it better for the firm to produce a quantity that is greater than zero than to produce q = 0?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics

Authors: Austan Goolsbee, Steven Levitt, Chad Syverson

1st Edition

978-1464146978, 1464146977

More Books

Students also viewed these Economics questions