Microeconomics 2nd Edition by Douglas Bernheim

Exercise 5

A price-taking firm's variable cost function is VC = Q 3 , where Q is its output per week. It has a sunk fixed cost of $3,000 per week. Its marginal cost is MC = 3 Q 2. What is its profit-maximizing output when the price is P = $243 What if the fixed cost is avoidable