A firm sells its product in a perfectly competitive market where other firms charge a price...

A firm sells its product in a perfectly competitive market where other firms charge a price of $120 per unit. The firm’s total costs are C(Q) = 50 + 12Q + 2Q2.

a. How much output should the firm produce in the short run?

b. What price should the firm charge in the short run?

c. What are the firm's short-run profit?

d. What adjustment should be anticipated in the long run?

Exit will occur since these economic profits are low

Entry will occur until economic profit shrink to zero

No firm will enter or exit at these profits

Expert Solution

Rahul Sunny answered 8 months ago

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