00:01
So here we're talking about supply and supply in competition.
00:07
Right.
00:07
So there are two parts here, right? first, supply is determined by price equals marginal cost, right? this is simple optimization, right? to profit max, you want to set price as equal to marginal cost.
00:21
But two, the part is only where price is greater than average variable cost.
00:30
Right and this is the shutdown condition if price is not greater than the average variable cost we are are shutting down the firm so graphically if i was to draw this quantity and price if i think of average variable cost and marginal so remember marginal cost goes through the minimum of average variable cost right this gap here would be the supply curve right so that's what i'm looking to i'm looking for the part of marginal cost that is above average variable cost, right? and remember, this intersection is at min average variable cost.
01:12
Once marginal cost, right, is pulling average variable cost up above the minimum.
01:17
So the first thing when you want to do here is find marginal cost.
01:21
Marginal cost is given to us.
01:23
Wonderful.
01:24
So 3q squared minus 16q plus 30...