Question
You are a manager in a perfectly competitive market. The price in your market is $30. Your total cost curve is C(Q) = 10 +
-
You are a manager in a perfectly competitive market. The price in your market is $30. Your total cost curve is C(Q) = 10 + 2Q + .5Q2.
a. What level of output should you produce in the short run?
b. What price should you charge in the short run?
c. Will you make any profits in the short run?
d. What will happen in the long run?
e. How would your answer change if your costs were C(Q) = 10 + 5Q + 30Q2?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
a To determine the level of output you should produce in the short run you need to identify the quantity where marginal cost MC equals the market price In perfect competition firms maximize their prof...
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
Precalculus
Authors: Michael Sullivan
9th edition
321716835, 321716833, 978-0321716835
