Problem IV: A perfectly competitive firm has a total cost function given by T C(Q) = 2Q3 – 20Q2 + 100Q. a) What will be the optimal quantity produced by the firm if the market price is P = 300? What will be the profit? (Q=10, Profit=2000) b) How about if the market price is P = 45? What will be the optimal quantity and profit in this case? (Q=0, Profit=D0) c) Find the break even point and the shut down point. (50) d) Assuming the initial market price of $300, what will be the optimal quantity and profit if a new fixed cost of $1000 has to be incurred by the firm? How about if this FC=$3000?

Problem IV: A perfectly competitive firm has a total cost function given by T C(Q) = 2Q3 – 20Q2 + 100Q. a) What will be the optimal quantity produced by the firm if the market price is P = 300? What will be the profit? (Q=10, Profit=2000) b) How about if the market price is P = 45? What will be the optimal quantity and profit in this case? (Q=0, Profit=D0) c) Find the break even point and the shut down point. (50) d) Assuming the initial market price of $300, what will be the optimal quantity and profit if a new fixed cost of $1000 has to be incurred by the firm? How about if this FC=$3000?

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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