00:01
So what do we know about optimization, right? you always want to set marginal revenue equals to marginal cost.
00:09
So let me replicate this diagram here, right? we have a quantity, we have a price, we have a marginal revenue curve.
00:16
Now, the marginal revenue curve is telling you that you're in a competitive industry, but that doesn't really matter, right? we have an average variable cost curve.
00:26
We have an average total cost curve.
00:30
And then we have a marginal cost curve.
00:35
And to my poor artistic skills, the diagram looks something like this.
00:40
So the first part for one is you want to set right, marginal revenue equals the marginal cost.
00:47
So you are interested in this point here, where the marginal revenue curve is crossing the marginal cost curve.
00:55
Now that happens at a quantity of 180.
00:59
So that's the answer to the first one...