Suppose price-taking firms have cost functions given by C(q) =90 + 5q + 0.025q2.
a. What are the equations of marginal costs and averagecosts?
b. How much would the firm produce at prices of $9, $10, $11,and $12?
c. How much profit would the firm earn at prices of $9, $10,$11, and $12?
d. Graph the MC, AC. Indicate the profits at a price of $9 perunit.
e. What price would be charged in the perfect competitiveequilibrium?
