a) Suppose that a firm’s production function is in the short run, where there are fixed costs of $1000, and x is the variable input whose cost is $4000 per unit. What is the total cost of producing a level of output q? In other words, identify the total cost function C(q).
b) Write down the equation for the supply curve.
c) If price is $1000, how many units will the firm produce? What is the level of profit? Illustrate your answer on a cost curve graph.