A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2How much output should the firm produce in the short run?What price should the firm charge in the short run?What are the firm’s short-run profits?What adjustments should be anticipated in the long run?Calculate the new optimal quantity and price.

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Answered: A firm sells its product in a perfectly…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A firm sells its product in a perfectly competitive market where other firms charge a price of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q²
1. How much output should the firm produce in the short run?
2. What price should the firm charge in the short run?
3. What are the firm’s short-run profits?
4. What adjustments should be anticipated in the long run?
5. Calculate the new optimal quantity and price.

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What adjustments should be anticipated in the long run and how would you calculate the new optimal quantity and price?

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