BUS 207 Study Guide - Quiz Guide: Externality, Market Clearing, Marginal Cost

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 207
• Professor: Karen Ruckman

Document Summary

Solutions to perf comp examples: a) if the firm produces a positive level of output, it will produce where price equals mc. Equating this with p yields 10=2q or q=5: profits = tr-tc = (10)(5) (100+5*5) = 50 100 25 = -, avc =vc/q, avc=q2/q=q. since q=5, avc=5. Since avc