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 price is $18, how much does the firm supply?
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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