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Assume a firm faces the following demand and cost functions: Demand is: Q = 2600 –...

Assume a firm faces the following demand and cost functions: Demand is: Q = 2600 – 100P + 0.2M – 500Pr ; AVC = 20 – 0.07Q + 0.0001Q^2; M = $20,000; Pr = $2; Should the firm shut down in the short-run? What are the expected profits if fixed costs are $22,500?

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Rahul Sunny answered 1 year ago
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