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 What are the firm’s short-run profits? What adjustments should be anticipated in the long run? Given these adjustments, calculate the new optimal quantity and price.
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 What are the firm’s short-run profits? What adjustments should be anticipated in the long run? Given these adjustments, calculate the new optimal quantity and price.
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 aprice of $110 per unit. The firm estimates its total costs as C(Q) = 70 + 14Q + 2Q2- What are the firm’s short-run profits?
- What adjustments should be anticipated in the long run?
- Given these adjustments, calculate the new optimal quantity and price.
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