Essay
Suppose that each firm in a perfectly competitive market has a short-run total cost of TC = 75 + 500Q - 5Q2 + 0.5Q3, where MC = 500 - 10Q + 1.5Q2.
a. Calculate the output that minimizes the firm's AVC.
b. What is the firm's shutdown price?
Correct Answer:
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"a. AVC is minimized where AVC = MC.
AVC...View Answer
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Correct Answer:
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AVC...
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