Question: The cost function for a firm is given as: TC = 5,000 + Q 2 MC = 2Q If the firm sells output in a

The cost function for a firm is given as:

TC = 5,000 + Q2 MC = 2Q

If the firm sells output in a perfectly competitive market and other firms in the industry sell output at a price of $2,000

A) What price should the manager of this firm charge?

B) What level of output should be produced to maximize profits?

Set P = MC and solve for Q

C) How much profit will be earned?

Profit = TR - TC

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