Suppose that for a particular perfectly competitive firm the AVC function is given by: AVC=200-7.5Q +.267Q2 and FC is equal to $250. Suppose also that the current market price equals $140. a. Find the MC curve for this firm. b. Find the profit maximizing output (note: you will need a quadratic equation solver - use Math is Fun quadratic equation solver if you like) but you will need to come up with the quadratic equation in your answer and indicate what a, b and c are equal to, then you are allowed to pick the bigger Q (the smaller Q will not be profit maximizing). You may round the Q you find to the nearest whole number. c. Calculate profits at this level of output.

Suppose that for a particular perfectly competitive firm the AVC function is given by: AVC=200-7.5Q +.267Q2 and FC is equal to $250. Suppose also that the current market price equals $140. a. Find the MC curve for this firm. b. Find the profit maximizing output (note: you will need a quadratic equation solver - use Math is Fun quadratic equation solver if you like) but you will need to come up with the quadratic equation in your answer and indicate what a, b and c are equal to, then you are allowed to pick the bigger Q (the smaller Q will not be profit maximizing). You may round the Q you find to the nearest whole number. c. Calculate profits at this level of output.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 6QP

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Q3: a. If a competitive firm is making loss in the short run, and it is selling a (100) units of a good at S.R(9). To be known that the AVC is S.R(10). What should the firm decide? If the quantity produced changed from 1 to 2, the total cost changed from 64 to 80 and the price is 40. b. What is the total revenue? c. What is the marginal cost?
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