A perfectly competitive firm has total revenue and total cost curves given by:
TR = 100Q
TC = 5,000 + 2Q + 0.2 Q2
a. Find the profit-maximizing output for this firm.
b. What profit does the firm make?
a. MR = 100
MC = 2 + .4Q
100 = 2 + .4Q
Q* = 245
b. Profit = 100 ? 245 - 5,000 - 2(245 ) - 0.2 (245 )2 = $7,005
You might also like to view...
To sell an extra unit of output, a perfectly competitive firm ________, and an imperfectly competitive firm ________.
A. need not alter its price; must lower its price B. must hope the market price falls; must lower its price C. must lower its price; must lower its price D. need not alter its price; need not alter its price
A situation in which each firm chooses the best strategy given the strategies chosen by other firms is called a
A) payoff matrix. B) collusion. C) dominant strategy. D) Nash equilibrium.
Which of the following is the injection into the circular flow model?
a. Money deposited in a savings account. b. Income earned through exports. c. Goods imported from abroad. d. Taxes paid by the individuals.
The Malthusian theory of population has its greatest applicability today in the ____ nations.
Fill in the blank(s) with the appropriate word(s).