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28 Sep 2019
A perfectly competitive firm has a total cost function given by T C(Q) = 2Q^3 and 20Q^2 + 100Q.
a) What will be the optimal quantity produced by the firm if the market price is P = 300? What will be the profit? (Q=10, Profit=2000)
b) How about if the market price is P = 45? What will be the optimal quantity and profit in this case? (Q=0, Profit=0)
c) Find the break even point and the shut down point. (50)
d) Assuming the initial market price of $300, what will be the optimal quantity and profit if a new fixed cost of $1000 has to be incurred by the firm? How about if this fixed cost is $3000?
A perfectly competitive firm has a total cost function given by T C(Q) = 2Q^3 and 20Q^2 + 100Q.
a) What will be the optimal quantity produced by the firm if the market price is P = 300? What will be the profit? (Q=10, Profit=2000)
b) How about if the market price is P = 45? What will be the optimal quantity and profit in this case? (Q=0, Profit=0)
c) Find the break even point and the shut down point. (50)
d) Assuming the initial market price of $300, what will be the optimal quantity and profit if a new fixed cost of $1000 has to be incurred by the firm? How about if this fixed cost is $3000?
Kritika KrishnakumarLv10
28 Sep 2019
