The Hair Stylist, Ltd., is a popular-priced hairstyling salon in College Park, Maryland. Given the large number
Question:
TC = $5,625 + $25Q + $0.01Q2
MC = $25 + $0.02Q
Where TC is total cost per month including capital costs, MC is marginal cost, and Q is the number of hairstyling’s provided. Total costs include a normal profit.
A. Calculate the firm’s profit-maximizing output level.
B. Calculate the firm’s economic profits at this activity level. Is this activity level sustainable in the long run?
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