Question: The short-run total cost function for a firm is given by: C = 292 - 60 + 1000 The firm sells in a perfectly competitive

The short-run total cost function for a firm is given by: C = 292 - 60 + 1000 The firm sells in a perfectly competitive market which has a ruling price of 134. (1) Compute the firm's profit-maximising level of output and the amount of profit earned. (6 marks) (10) Does the firm produce at a minimum average cost? (5 marks) (11) If the price at the market increases to 140, what will be the firm's response? (5 marks) Assume, instead, that the firm operates under imperfect competition, and faces the following downward-sloping demand curve: P = 150

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