Essay
A firm has total cost given by TC = q3 - 20q2 + 200q + 576. Suppose the firm faces a marginal revenue curve given by P = 200.
i)What is the optimal quantity for this firm to produce?
ii)Calculate the firm's profit, fixed cost, and variable cost if it produces 12 units of output?
iii)What effect would each of the following have on MC?
a)The price of the variable input decreases.
b)The price of the fixed input increases.
c)A technological improvement increases the returns to scale of the production process.
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i)This is the quantity where MR = MC. We...View Answer
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