Question: READ DIRECTIONS CAREFULLY. SHOW ALL WORK Problem 11 (15 points) ... For a profit-maximizing, perfectly competitive, firm with a marginal-cost function MC (q)= 3q~ +

READ DIRECTIONS CAREFULLY. SHOW ALL WORK Problem 11 (15 points) ...

READ DIRECTIONS CAREFULLY. SHOW ALL WORK

Problem 11 (15 points) ... For a profit-maximizing, perfectly competitive, firm with a marginal-cost function MC (q)= 3q~ + 4q + 2. Producer Surplus is defined as the excess of price over marginal cost, summed for all units produced, the area on a price-quantity diagram below the price and above marginal cost. Find: a.) PS at price po = 22 (Remember: firm chooses output q* such that MC (q*) = p) b.) PS at price p, = 134 (Remember: firm chooses output q* such that MC (q*) = p) c.) APS resulting from the price change po = 22 to p1 = 134

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