Remember Otto’s brother Dent Carr, who is in the auto repair business? Dent found that the total cost of repairing s cars is c(s) = 2s2 + 100.
(a) This implies that Dent’s average cost is equal to _________, his average variable cost is equal to _____, and his marginal cost is equal to ____. On the graph below, plot the above curves, and also plot Dent’s supply curve.
(b) If the market price is $20, how many cars will Dent be willing to repair? _____. If the market price is $40, how many cars will Dent repair? ____.
(c) Suppose the market price is ______ and Dent maximizes his profits. On the above graph, shade in and label the following areas: total costs, total revenue, and total profits.