Consider a perfectly competitive firm with a total cost function given by: C(q) = 1 + 0.5 q² where q is quantity supplied. The market price for the good that the firm produces is equal to 2. Indicate which of the following statements is true. Select one: O The firm is making losses. O In equilibrium, total cost is equal to 4. O The firm is making strictly positive profits. O Optimal supply is equal to 4. O None of the statements is correct. 4
Consider a perfectly competitive firm with a total cost function given by: C(q) = 1 + 0.5 q² where q is quantity supplied. The market price for the good that the firm produces is equal to 2. Indicate which of the following statements is true. Select one: O The firm is making losses. O In equilibrium, total cost is equal to 4. O The firm is making strictly positive profits. O Optimal supply is equal to 4. O None of the statements is correct. 4
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Consider a perfectly competitive firm with a total cost function given by:
C(q) = 1 + 0.5 q²
where q is quantity supplied. The market price for the good that the firm produces is equal to 2. Indicate which of the following
statements is true.
Select one:
O The firm is making losses.
O In equilibrium, total cost is equal to 4.
O The firm is making strictly positive profits.
O Optimal supply is equal to 4.
O None of the statements is correct.
4
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