Question
The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in
The market determined price in a perfectly competitive industry is P = Rs. 10. Suppose that the total cost equation of an individual firm in the industry is given by the expression
TC 1000+2Q+0.01Q2
a) What is the firm's profit-maximizing output level and profit? Is this profit normal profit or supper normal profit? Justify your answer (10 marks)
b) At profit maximizing level what is firm total cost, total revenue and marginal cost (10 Marks)
c) Why does a competitive firm is considered as a price taker and Monopoly firm as a price maker (05 Marks)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started