Exercise 3: A perfect competition firm has a demand equaltion of P=8 ($) and total cost equation of TC=Q²+ 2Q+ 4 ($) 1. Identify TR and MR equation? 2. Identify MC, VC, AVC, AFC, ATC equation? 3. What is optimal output level (Q) that gives the firm profit maximization? What is the maximum profit?

Exercise 3: A perfect competition firm has a demand equaltion of P=8 ($) and total cost equation of TC=Q²+ 2Q+ 4 ($) 1. Identify TR and MR equation? 2. Identify MC, VC, AVC, AFC, ATC equation? 3. What is optimal output level (Q) that gives the firm profit maximization? What is the maximum profit?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

can u please solve this excercise for me? thank you

Exercise 3:
A perfect competition firm has a demand equaltion of P=8 ($) and total
cost equation of TC= Q²+ 2Q+ 4 ($)
1. Identify TR and MR equation?
2. Identify MC, VC, AVC, AFC, ATC equation?
3. What is optimal output level (Q*) that gives the firm profit
maximization? What is the maximum profit ?
4. What is break even price and break even quantity?
5. If market price decrease to P= 4$, should the firm continue the
production? Why?

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