Assume the market for a good is perfectly competitive and the market equilibrium price is $5.00. The profit maximizing output is 200. At this output level, the AVC = $3.00 and ATC = $6.00. %3D a. Should the firm keep producing in the short run? b. What are profits or losses in either scenario? Suppose the market price of a good is $20 and TC=0.5Q². What Q should a profit maximizing perfectly competitive firm choose? What are profits? Suppose that the long run TC function is as follows: TC=1000+10Q² (and total cost is 0 if Q is less than 0). If the going price in the nduet y ie C a0 :e the merke in le g

Assume the market for a good is perfectly competitive and the market equilibrium price is $5.00. The profit maximizing output is 200. At this output level, the AVC = $3.00 and ATC = $6.00. %3D a. Should the firm keep producing in the short run? b. What are profits or losses in either scenario? Suppose the market price of a good is $20 and TC=0.5Q². What Q should a profit maximizing perfectly competitive firm choose? What are profits? Suppose that the long run TC function is as follows: TC=1000+10Q² (and total cost is 0 if Q is less than 0). If the going price in the nduet y ie C a0 :e the merke in le g

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter5: Investment Decisions: Look Ahead And Reason Back

Section: Chapter Questions

Problem 5.6IP

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