(a) Let production be Q(L) = 100 L² - L³ and costs be C(Q) = 250L +600. Show how average costs change as Q rises. Explain why it behaves in the way it does. You can use a spreadsheet or math to illustrate. (b) Suppose P = $15. What is the profit maximizing level of L and Q? Show your work. (c) What is the firms shut-down price given costs = 250L + 600? Show and explain.<

(a) Let production be Q(L) = 100 L² - L³ and costs be C(Q) = 250L +600. Show how average costs change as Q rises. Explain why it behaves in the way it does. You can use a spreadsheet or math to illustrate. (b) Suppose P = $15. What is the profit maximizing level of L and Q? Show your work. (c) What is the firms shut-down price given costs = 250L + 600? Show and explain.<

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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