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Question 2 (15 marks) a)Suppose a firm has the following total cost function TC = 100 + 2q 2 . i)If price equals $20, what
Question 2 (15 marks)
a)Suppose a firm has the following total cost function TC = 100 + 2q2.
i)If price equals $20, what is the firm's output decision? (4 marks)
ii)What are its short-run profits?(3 marks)
b)A monopolist has the cost function of TC =100+10Q+ 2Q2, and the demand curve it faces is p =90-2Q.
i)Find the marginal revenue and marginal cost functions.(3 marks)
ii)What will be the price and quantity for profit maximization?(3 marks)
iii)Calculate the profit for the firm. (2 marks)
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