Suppose that, for perfectly competitive firm of marginal cost function is given by:

MC = Q

2

-2Q+20, then

A. Find the equilibrium level of output, if price per unit of a good produced is birr 44.

B. Find total amount of MC, Total Cost and Total revenue

C. Find maximum amount of profit

D. Find minimum price that required by the firm to stay in the market

In a perfectly competitive market suppose that a competitive firm's marginal cost of producing output q is given by MC(q)=3+2q. Assume that the market price of the product is $9:

A.What level of output will the firm produce?
B.What is the firm's producer surplus?

Consider a firm in a perfectly competitive market with total costs given by TC = Q3 -15Q2 + 100Q + 30

a.) What is this firm's marginal cost function? Over what range of output is the firm's marginal costs decreasing? Increasing?

b.) Suppose that the market price is $52. What is this firm's profit-maximizing level of output? How do you know this is the profit-maximizing output? How much profit does this firm earn by producing the profit-maximizing output?

Question:

Evaluate the following statement:

In the short-run, information about a perfectly competitive firm's fixed costs is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output.

Answer:

The profit-maximizing level of output in a perfectly competitive market is determined at the level where marginal revenue (MR) equals marginal cost (MC). Marginal revenue is the additional revenue earned by selling an additional unit of output, while marginal cost is the additional cost of producing an additional unit of output (Farnham, 2014). Additionally, in order to find the amount of profit earned, we need to know the total cost and total revenue amounts. Total cost is the total of variable and fixed cost. Therefore, in short-run production, a firm's fixed cost is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output.

Farnham, P (2014) Economics for Managers 3^rd edition

~Beth

I need a peer reply for this, please.