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

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