Question
Tom runs a small Window Washing Service which operates in a perfectly competitive market in Melbourne.The short run total cost of production is:TC= 40+10Q+0.1Q 2
Tom runs a small Window Washing Service which operates in a perfectly competitive market in Melbourne.The short run total cost of production is:TC= 40+10Q+0.1Q2, where Q is the number of windows washed per day. The prevailing market price is $20 per window.
How many windows should Tom wash to maximise profit?Calculate Tom's daily profit?
Draw a graph to illustrate your answer to part (a) and show the profit level for the firm.Should the firm shut down or continue to produce?Explain.
Explain whether this market is in long run equilibrium.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
