2. Let a firm's short run total cost curve be given by c(y) = 10+10y-y²+0.25y³; therefore: MC = 10 – 2y + 0.75y². All fixed costs are sunk. (a) Find the firm's short run supply curve (you may write it in inverse form). Draw it on a graph. (b) How much will the firm produce if p = $10? At this point, is the firm covering all costs (including fixed costs)?
2. Let a firm's short run total cost curve be given by c(y) = 10+10y-y²+0.25y³; therefore: MC = 10 – 2y + 0.75y². All fixed costs are sunk. (a) Find the firm's short run supply curve (you may write it in inverse form). Draw it on a graph. (b) How much will the firm produce if p = $10? At this point, is the firm covering all costs (including fixed costs)?
Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter7: Production, Inputs, And Cost: Building Blocks For Supply Analysis
Section: Chapter Questions
Problem 1DQ
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![2. Let a firm's short run total cost curve be given by c(y) = 10+10y–y²+0.25y³; therefore:
MC = 10 – 2y + 0.75y². All fixed costs are sunk.
(a) Find the firm's short run supply curve (you may write it in inverse form). Draw it
on a graph.
(b) How much will the firm produce if p = $10? At this point, is the firm covering all
costs (including fixed costs)?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F001eda53-19f3-49af-8959-1aa5b0b6fb9b%2F71308923-9e32-407f-939d-fdfa9d8762da%2F8lc8laf_processed.png&w=3840&q=75)
Transcribed Image Text:2. Let a firm's short run total cost curve be given by c(y) = 10+10y–y²+0.25y³; therefore:
MC = 10 – 2y + 0.75y². All fixed costs are sunk.
(a) Find the firm's short run supply curve (you may write it in inverse form). Draw it
on a graph.
(b) How much will the firm produce if p = $10? At this point, is the firm covering all
costs (including fixed costs)?
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