Question #1: Perfect Competition Kevins Kayak Company produces kayaks. Assume that the kayakindustry is perfectly competitive. The firm has a total cost function of TC(Q) = 240,10 12875 4 Q+. Kevincan sell all the kayaks he produces for $1,200 each.(a) How many kayaks should Kevin produce (i.e., findQ)? (b) Calculate the ATC if Kevin produced at the output level you found in Part (a)? (b) How much profitwould Kevin make at the output level found in Part (a)? (c) Should Kevin stay in business? You must justifyyour answer using the shut-downrule (relating price and average variable cost)!

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Answered: Question #1: Perfect Competition Kevins…

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter11: Profit Maximization

Section: Chapter Questions

Problem 11.4P

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