Consider the following total cost function for an individual firm: C(q) = 10 + q +÷q?.a- At what level of output is average cost at its lowest?b- Draw a graph showing firm average cost against quantity.c- Suppose that there is an industry with two identical firms, with this cost function.What is the industry total cost curve? What is the industry marginal cost curve?d- Suppose these two firms together act in a perfectly competitive manner. What is theprice level in the case where these firms act perfectly competitively? What are theprofits of the firms given perfectly competitive pricing?

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Answered: Consider the following total cost…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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