2. Suppose that each firm in a perfectly competitive market has a short- run total cost of TC = 75 + 500Q – 5Q²+ 0.5Q', where MC = 500 – 10Q + 1.5Q°. a. Calculate the output that minimizes the firm's AVC. b. What is the firm's shutdown price?

2. Suppose that each firm in a perfectly competitive market has a short- run total cost of TC = 75 + 500Q – 5Q²+ 0.5Q', where MC = 500 – 10Q + 1.5Q°. a. Calculate the output that minimizes the firm's AVC. b. What is the firm's shutdown price?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: Firms In Competitive Markets

Section: Chapter Questions

Problem 5CQQ

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2. Suppose that each firm in a perfectly competitive market has a short-
run total cost of TC = 75 + 500Q – 5Q²+ 0.5Q', where MC = 500 –
10Q + 1.5Q°.
a. Calculate the output that minimizes the firm's AVC.
b. What is the firm's shutdown price?

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