Question: 1. What happen to a competitive firm whose cost function exhibits decreasing MC (marginal cost) for all positive values? Construct a concrete cost function of

1. What happen to a competitive firm whose cost function exhibits decreasing MC (marginal

cost) for all positive values? Construct a concrete cost function of this and carry

out the search for a profit-maximising quantity. Graph such a MC function and its

corresponding AC (average cost).

2. Find the marginal and average cost functions of the total cost function TC = Q324Q2+

600Q.

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