Suppose price-taking firms have cost functions given by C(q) = 90 + 5q + 0.025q2. a....

Suppose price-taking firms have cost functions given by C(q) = 90 + 5q + 0.025q2.

a. What are the equations of marginal costs and average costs?

b. How much would the firm produce at prices of $9, $10, $11, and $12?

c. How much profit would the firm earn at prices of $9, $10, $11, and $12?

d. Graph the MC, AC. Indicate the profits at a price of $9 per unit.

e. What price would be charged in the perfect competitive equilibrium?

Expert Solution

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Rahul Sunny answered 8 months ago

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