Joshua owns a small boat and catches lobster off the coast of Maine. His weekly cost function is TC(q) = 40 + 5q + 5q2. He sells his lobsters to the local wholesaler at the market price p %3D (in dollars). a) Find Joshua's short-run supply function for lobsters. (Hint: In this case short-run marginal cost is the same as long-run marginal cost.) b) Find Joshua's long-run supply function for lobsters. c) Find Joshua's shutdown price and Joshua's breakeven price (the price at which profit equals zero). d) Suppose the market price is $30, calculate his profit. What will Joshua do in the long run? Explain.

Joshua owns a small boat and catches lobster off the coast of Maine. His weekly cost function is TC(q) = 40 + 5q + 5q2. He sells his lobsters to the local wholesaler at the market price p %3D (in dollars). a) Find Joshua's short-run supply function for lobsters. (Hint: In this case short-run marginal cost is the same as long-run marginal cost.) b) Find Joshua's long-run supply function for lobsters. c) Find Joshua's shutdown price and Joshua's breakeven price (the price at which profit equals zero). d) Suppose the market price is $30, calculate his profit. What will Joshua do in the long run? 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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