Lily's bakery operates in a perfectly competitive market where the prevailing price for a pumpkin (her only product) is $3. If Lily's marginal cost function is given by MC=0.1q: (i) Lily's profit-maximizing level of output is _______ (ii) Lily's variable profit is _______ (iii) The producer surplus is _______ If Lily also has a fixed cost of $50, then: (iv) her total profit is _______ Assuming Lily cannot avoid the fixed cost, should Lily continue to produce orshut down?

Lily's bakery operates in a perfectly competitive market where the prevailing price for a pumpkin (her only product) is $3. If Lily's marginal cost function is given by MC=0.1q: (i) Lily's profit-maximizing level of output is ___ (ii) Lily's variable profit is _ (iii) The producer surplus is _ If Lily also has a fixed cost of $50, then: (iv) her total profit is ___ Assuming Lily cannot avoid the fixed cost, should Lily continue to produce orshut down?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.1P: A firm in a perfectly competitive industry has patented a newprocess for making widgets. The new...

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