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Suppose a firm has the following LR total cost curve: C(Q)=20,000Q-200Q 2 +Q 3 Find the Q at which economies of scale switch to diseconomies

  1. Suppose a firm has the following LR total cost curve:

C(Q)=20,000Q-200Q2+Q3

  1. Find the Q at which economies of scale switch to diseconomies of scale.

  1. Draw the graph with short run and long run cost curves.

  1. Suppose the market price of a good is $20 and TC=0.5Q2.
  2. What Q should a profit maximizing perfectly competitive firm choose?
  3. What are profits?
  4. Draw a graph that shows the short run choice of Q, revenue and profits.

  1. Draw a set of SR average cost curves and marginal cost, and show the firm's supply curve on the graph. Discuss why this is the firm's supply curve.

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