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  3. 1. suppose price-taking firms have cost functions

1. Suppose price-taking firms have cost functions given by C(q) = 90 + 5q + 0.025q...

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Economics

1. Suppose price-taking firms have cost functions given by C(q)= 90 + 5q + 0.025q .

  1. What are the equations of marginal costs and average costs?

  2. How much would the firm produce at prices of $9, $10, $11, and$12?

  3. How much profit would the firm earn at prices of $9, $10, $11,and $12?

  4. Graph the MC, AC. Indicate the profits at a price of $9 perunit.

  5. What price would be charged in the perfect competitiveequilibrium?

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Answer & Explanation Solved by verified expert
4.1 Ratings (407 Votes)
The cost function isCq 90 5q 0025q2I think the question misses to put squared on 0025qAssume the question is Cq 90 5q 0025q2The marginal cost is MCq dCdq 5 005qThe average cost is ACq Cqq 90q 5 0025qSince the firm is price taker equilibrium is    See Answer
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