Question: 1) The market for Commodity A operates in a perfectly competitive market and the demand curve is defined by: P = 200 - 0.2Q D

1) The market for Commodity A operates in a perfectly competitive market and the demand curve is defined by:

P = 200 - 0.2Q_D

The supply curve is defined as:

P = 4 + 0.3Q_S

Solve for the equilibrium levels of price and quantity that the market will bear.

You are the manager of your firm and you are trying to decide how much output you will be producing. You have total fixed costs of $10 and total variable costs of:

TVC = Q + 0.5Q²

How much of the total market quantity should your firm produce to maximize its profit? How can you confirm that this level is really a maximum and not a minimum?

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