A firm in a perfectly competitive industry has fixed costs of FC = 3 and average variable costs of AVC = 2 + 8q. a) What are the firm’s variable costs (VC)? b) What is the firm’s total cost function? c) If the price is $18, how much does the firm supply?
A firm in a
a) What are the firm’s variable costs (VC)?
b) What is the firm’s total cost function?
c) If the
d) Does the firm continue to supply this quantity in the short run?
e) Suppose there exists a standard
f) Suppose the market demand was given by Qd(p) = 50 – p. Suppose further that a sales tax of £1 per unit is imposed in the market. Calculate the
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