Essay
Suppose that a firm operates in a competitive market where the commodity price is $15 per unit. The firm's cost equation is C = 25 + .25Q2, where C = total cost and Q = quantity.
(a) Find the profit-maximizing level of output for the firm. Determine its level of profit.
(b) Suppose that fixed costs increase to $75. Verify that this change in fixed costs does not
affect the firm's optimal output.
Correct Answer:
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The increase in fixed cost has no effect...View Answer
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Correct Answer:
Verified
View Answer
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