Question: Short-run costs example - Homework assignment Electronic repair business Marginal and Average Cost curves in short-run Fixed costs $270,000 for Lease, tools, overhead staff) C(q)

Short-run costs example - Homework assignment

Electronic repair business Marginal and Average Cost curves in short-run

Fixed costs $270,000 for Lease, tools, overhead staff)

C(q) = 270 + 30q + 0.3q2

Demand given by p = 50 - 0.2q

1. Calculate MR, AVC

2. Plot the Demand, AC, MC, MR & AVC curves

3. What is the profit maximizing output q and p

4. What is the firm's best course of action in the short run?

5. In the long run?

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