A price-taking firm's variable cost function is VC=2Q3, V C = 2 Q 3 , where...

A price-taking firm's variable cost function is

VC=2Q3,
V
C
=
2
Q
3
,

where Q is its output per week. It has a sunk fixed cost of $2,916 per week. Its marginal cost is

MC=6Q2.
M
C
=
6
Q
2
.

a. What is the firm’s supply function when the $2,916 fixed cost is sunk?

Instructions: Enter your answer as a whole number.

Q = (P/6)0.5 for P ≥ $.

b. What is the firm’s supply function when the fixed cost is avoidable?

Instructions: Enter your answer as a whole number.

Q = (P/6)0.5 for P ≥ $.

Solutions

Expert Solution

Rahul Sunny answered 2 years ago

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