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28 Sep 2019
A firm faces the demand function Qd = 60 - P and the cost function C = 11Q2 +5. (a) What is the optimal quantity that a price-taking (and profit-maximizing) firm should supply?
(b) What is the profit when the quantity produced is optimal?
(c) Construct a graph showing the demand curve, the MR curve, the MC curve, and the AC curve. Show the equilibrium point (where Q is optimal); indicate the point's coordinates (i.e. P* and Q*). Show in the graph the area that corresponds to profit.
A firm faces the demand function Qd = 60 - P and the cost function C = 11Q2 +5. (a) What is the optimal quantity that a price-taking (and profit-maximizing) firm should supply?
(b) What is the profit when the quantity produced is optimal?
(c) Construct a graph showing the demand curve, the MR curve, the MC curve, and the AC curve. Show the equilibrium point (where Q is optimal); indicate the point's coordinates (i.e. P* and Q*). Show in the graph the area that corresponds to profit.
Nusrat FatimaLv10
28 Sep 2019
