Suppose that the marginal cost of producing a public service is MC = 100 - 2q while
Question:
a. If the optimal quantity of the public service is q = 20, compute the MC and the ATC at that quantity.
b. Compute the revenue that would be generated by charging a price equal to marginal cost.
c. Compute the total cost of providing q = 20 units of the public service.
d. Compute the deficit that results from marginal cost pricing.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Question Posted: