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In: Economics

1. Show your work for the questions below.Suppose a perfectly competitive firm has TC = 0.15q2...

1. Show your work for the questions below.Suppose a perfectly competitive firm has TC = 0.15q2 – 54q + 3500 and MC = 0.3q - 54.

a.If market price for this firm’s product is $96, what is its profit maximizing level of output? Show your work.

b.What is the firm’s profit at this price? Show your calculation.

2. Consider a customized t-shirt printing business. Which of the following would be variable costs (VC) and which would be fixed costs (FC)? Write VC or FC to the left of each to indicate which they would be.

Rent

Cost of ink

Cost of plain shirts

Purchase price of printing machine

3. Which of the costs (fixed, variable, or both) need to be covered for profits to be greater than or equal to zero?

Solutions

Expert Solution

Rahul Sunny answered 7 months ago
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