3. (a) Suppose a perfectly competitive firm has the following total cost function for the short run: STC = 100 +100Q + 5Q² +÷Q° Determine its profit-maximizing output and profit for the short run, given the market price of its product is P-$300 per unit. (b) Now disregard the proceeding cost function, and suppose its long-run total cost is: LTC = 54Q – 2.4Q² +0.03Q' Indicate the firm's long-run price, quantity sold, and profit, assuming the industry is in long-run equilibrium.

3. (a) Suppose a perfectly competitive firm has the following total cost function for the short run: STC = 100 +100Q + 5Q² +÷Q° Determine its profit-maximizing output and profit for the short run, given the market price of its product is P-$300 per unit. (b) Now disregard the proceeding cost function, and suppose its long-run total cost is: LTC = 54Q – 2.4Q² +0.03Q' Indicate the firm's long-run price, quantity sold, and profit, assuming the industry is in long-run equilibrium.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

3. (a) Suppose a perfectly competitive firm has the following total cost function for the short run:
STC = 100+100Q + 5Q² +Q*
3*
Determine its profit-maximizing output and profit for the short run, given the market price of its
product is P-$300 per unit.
(b) Now disregard the proceeding cost function, and suppose its long-run total cost is:
LTC = 54Q – 2.4Q² + 0.03Q*
Indicate the firm's long-run price, quantity sold, and profit, assuming the industry is in long-run
equilibrium.

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