Question

A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(Q) = 40 + 8Q + 2Q^2. a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profits? d. What adjustments should be anticipated in the long run?

Name: a firm sells its product in a perfectly competitive market where other firms charge a price of 80 per unit the firmtms total costs are cq 40 8q 2q2a how much output should the firm produce i 58886
Uploaded: 2023-07-20T01:58:47-08:00
Duration: 1 min 20 s
Channel: Bryan Kim
Description: a firm sells its product in a perfectly competitive market where other firms charge a price of 80 per unit the firmtms total costs are cq 40 8q 2q2a how much output should the firm produce i 58886

          A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(Q) = 40 + 8Q + 2Q^2.

a. How much output should the firm produce in the short run?
b. What price should the firm charge in the short run?
c. What are the firm's short-run profits?
d. What adjustments should be anticipated in the long run?

Added by Mariano E.

Principles of Economics

Gregory Mankiw 8th Edition

Instant Answer

Solved by Expert Bryan Kim

07/20/2023

Step 1

The marginal cost is given by the derivative of the total cost function with respect to quantity, which is $8 + 4Q$. Setting this equal to the price of $80, we get: \[80 = 8 + 4Q\] \[72 = 4Q\] \[Q = 18\] Therefore, the firm should produce 18 units in the short Show more…

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A firm sells its product in a perfectly competitive market where other firms charge a price of $80 per unit. The firm's total costs are C(Q) = 40 + 8Q + 2Q^2. a. How much output should the firm produce in the short run? b. What price should the firm charge in the short run? c. What are the firm's short-run profits? d. What adjustments should be anticipated in the long run?