Question: 2 . A firm has a cost function that satisfies the following: ( i ) PS ( y ) Pi ( y ) =
A firm has a cost function that satisfies the following: i PSyPi y for all yii SMCAVC and iii
y
AVCy
pts a Derive the firm's cost function Cy marginal cost function SMCy average cost SACy and average variable cost function AVCy Show AVC,SMC and SAC on a graph. b Suppose the market price is How many units would the firm produce? Determine the associated profit and producer surplus for the firm.
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