Question
The Affordable Trucking Company faces the following cost function: C(q) = 3+2q+q 2 . Also, this firm is in a perfectly competitive market and faces
The Affordable Trucking Company faces the following cost function: C(q) = 3+2q+q 2 . Also, this firm is in a perfectly competitive market and faces an equilibrium market price, p* , equal to $10
(a) How do you create a table for the firm's total cost, marginal cost, marginal revenue, total revenue, and profits for q = 0, 1, 2, , 10 (Hint: under perfect competition the market price determines marginal revenue).
(b) Use your tables from part (a) to plot the firm's marginal cost, marginal revenue, and profit functions
(c) Use your results from both your table and your plots to determine the firms profit maximizing output level, q*
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