Consider a perfectly competitive firm with the following cost function: TC = 2(Q) + 1600 The...

 

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Consider a perfectly competitive firm with the following cost function: TC = 2(Q) + 1600 The firm sells its output for $168 per unit. A. B. C. D. Find the profit-maximizing level of output. Represent this problem graphically. Be sure to point out the optimal point and profit area on your graph. Briefly describe what will happen to this firm/industry in the long run. 168 Now suppose that price is 90 rather than . In what way will the story in part C be different, but have the same ending? Consider a perfectly competitive firm with the following cost function: TC = 2(Q) + 1600 The firm sells its output for $168 per unit. A. B. C. D. Find the profit-maximizing level of output. Represent this problem graphically. Be sure to point out the optimal point and profit area on your graph. Briefly describe what will happen to this firm/industry in the long run. 168 Now suppose that price is 90 rather than . In what way will the story in part C be different, but have the same ending?

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A ProfitMaximizing Level of Output The profitmaximizing level of output for the firm when the price ... View the full answer