Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please explain this question and show how you reached the final answer, I have been having some difficulty grasping the concept, thank you! Suppose a
Please explain this question and show how you reached the final answer,
I have been having some difficulty grasping the concept, thank you!
Suppose a profit-maximizing firm produces output q, selling it for a price of $20 per unit regardless of what the firm does. In other words, the firm does not have any market power over its output price. In the short-run, the firm has to pay $50 dollars for its installations, regardless of how much it sells. Furthermore, its variable costs may be represented 0.1q- + 10q. (a) Write an expression for this firm's total costs, as a function of output. (b) Write an expression for this firm's marginal costs, as a function of output. (c) What amount of output should this firm produce? Do not forget to consider the possible scenario in which the firm may choose q = 0Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started