A representative firm with short-run total cost given by TC = 50 + 2q + 2q^2 operates in a competitive industry where the short-run market demand and supply curves are given by QD = 1,410 - 40P and QS = -390 + 20P. Its short-run profit maximizing level of output is A. 0 units. B. 1 unit. C. 2 units. D. 5 units. E. 7 units.
Added by Lynn P.
Step 1
1,410 - 40P = -390 + 20P 1,800 = 60P P = 30 Now, we need to find the marginal cost (MC) of the firm, which is the derivative of the total cost function with respect to q. Show more…
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