Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose in the short run a perfectly competitive firm has variable cost = 3q 2 , and MC = 6q where q is the quantity

Suppose in the short run a perfectly competitive firm has variable cost = 3q2, and MC = 6q where q is the quantity of output produced. Also, the firm has fixed cost F = 3200.

a) (8 points) If the market price of the product is 198, how much output should the firm produce in order to maximize profit?

b) (6 points) How much profit will this firm make?

c) (6 points) Given your answer to b), what will happen to the market price as we move from the short run to the long run?

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

International Economics

Authors: Dominick Salvatore

12th edition

9781118955727, 1118955765, 1118955722, 978-1118955765

More Books

Students also viewed these Economics questions

Question

as a runner sprints down a track,her movement is an example of

Answered: 1 week ago

Question

Go, do not wait until I come

Answered: 1 week ago