Consider the following cost curve for a firm in a competitive industry where the market price equals $150.C= =q° + 6q + 1,500.What is the firm's marginal cost (MC)?MC = 150. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.)At what level of output does the firm maximize profits (minimize losses)?Profit is maximized at 12 units of output. (Round your answer to two decimal places.)What is the firm's profit maximizing price?The profit-maximizing price is $ (Round your response to the nearest dollar.)What is the firm's profit?The firm earns a profit of $. (Round your response to the nearest penny.)In the short-run, this firm shouldshut downproduceDEGtv20MacBook AirPIISOF11F12FSF10F9F6F7F2F3F4&#3$4678-23{ERYPQАFGHJKLD?CVMcommandoptioncommand.. .-レΛ.

Answered: Consider the following cost curve for a…

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Perefect Competition

Section: Chapter Questions

Problem 5SQP

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Consider the following cost curve for a firm in a competitive industry where the market price equals $150.
C= =q° + 6q + 1,500.
What is the firm's marginal cost (MC)?
MC = 150. (Properly format your expression using the tools in the palette. Hover over tools to see keyboard shortcuts. E.g., a superscript can be created with the ^ character.)
At what level of output does the firm maximize profits (minimize losses)?
Profit is maximized at 12 units of output. (Round your answer to two decimal places.)
What is the firm's profit maximizing price?
The profit-maximizing price is $ (Round your response to the nearest dollar.)
What is the firm's profit?
The firm earns a profit of $. (Round your response to the nearest penny.)
In the short-run, this firm should
shut down
produce
DEG
tv
20
MacBook Air
PII
SO
F11
F12
FS
F10
F9
F6
F7
F2
F3
F4
&
#3
$
4
6
7
8
-
2
3
{
E
R
Y
P
Q
А
F
G
H
J
K
L
D
?
C
V
M
command
option
command
.. .-
レ
Λ.

Expert Solution

Introduction

The rise or decrease in the cost of producing one more item or serving one more client is referred to as marginal cost. It's also referred to as incremental cost.

Marginal costs are based on variable or direct production expenses – such as labor, materials, and equipment – rather than fixed costs that the company would incur whether it boosts production or not.

When enough goods have been produced to cover fixed costs and production has reached a break-even point, the only expenses going forward are variable or direct costs, it is commonly estimated. Marginal cost is usually the same as average cost when average costs are steady, as opposed to instances where material costs change due to scarcity constraints.

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