Suppose a firm operating under perfect competition in the short run has the following total cost...

Suppose a firm operating under perfect competition in the short run has the following total cost function;

C = 125 + q^2

If price equals $30;

a. What is the profit maximizing level of output q? (Hint: P = MC)

b. Should the firm shut down or continue to produce? Explain in detail.

c. Is the firm making a profit, loss, or breaking even?

Expert Solution

Rahul Sunny answered 2 years ago

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