Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 6. Consider the Sunshine Company, a perfectly competitive firm with the following cost function: TC=1200 + 6 + 2=2 where Q is the firm's

Question 6. Consider the Sunshine Company, a perfectly competitive firm with the following cost function: TC=1200 + 6 + 2=2 where Q is the firm's output per day.

a) Find the firm's marginal cost function. [2 marks]

b) If the price of Sunshine's product equals $66, how many units per day should the firm produce? [4 marks]

c) Find the firm's average variable cost function. [3 marks]

d) Is average variable cost at the quantity you calculated in part b) is less than the price of $66? What does it mean? [4 marks]

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

Step: 3

blur-text-image

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

Managing in a Global Economy Demystifying International Macroeconomics

Authors: John E. Marthinsen

2nd edition

128505542X, 978-1305176157, 1305176154, 978-1285055428

More Books

Students also viewed these Economics questions

Question

1. To take in the necessary information,

Answered: 1 week ago