(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.<

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter7: Proudction Costs

Section: Chapter Questions

Problem 9SQP

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