In: Economics
A company in perfect competition has the total cost function:
C(q) = 50 + 0.5 q + 0.08 q2
a. Determine what is the long-run equilibrium price level and the corresponding output of the firm..
b. If the company experiences a technological improvement that reduces its costs by 25%, what is the equilibrium quantity of the company in the short term if the market price is the one found in point a.