Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![p= 130 - 2Q.
The firm's cost curve is
C(Q) = 20 + 6Q.
What is the profit-maximizing solution?
The profit-maximizing quantity is O. (Round your answer to two decimal places.)
The profit-maximizing price is $. (round your answer to two decimal places.)
What is the firm's economic profit?
The firm earns a profit of $]. (round your answer to two decimal places.)
How does your answer change if C(Q) = 100 + 6Q? The increase in fixed cost
O A. causes the firm to increase both the price and quantity, and profit increases.
O B. has no effect on the equilibrium price and quantity, but profit will decrease.
OC. has no effect on the equilibrium quantity, but the equilibrium price increases and profit increases.
OD. has no effect on the equilibrium quantity, but the equilibrium price increases and profit decreases.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdf6618b0-d266-40e2-8438-acd8990b98b9%2F274e8bb0-157a-43cb-8750-75304f06911e%2Fgff7r3e_processed.jpeg&w=3840&q=75)
Transcribed Image Text:p= 130 - 2Q.
The firm's cost curve is
C(Q) = 20 + 6Q.
What is the profit-maximizing solution?
The profit-maximizing quantity is O. (Round your answer to two decimal places.)
The profit-maximizing price is $. (round your answer to two decimal places.)
What is the firm's economic profit?
The firm earns a profit of $]. (round your answer to two decimal places.)
How does your answer change if C(Q) = 100 + 6Q? The increase in fixed cost
O A. causes the firm to increase both the price and quantity, and profit increases.
O B. has no effect on the equilibrium price and quantity, but profit will decrease.
OC. has no effect on the equilibrium quantity, but the equilibrium price increases and profit increases.
OD. has no effect on the equilibrium quantity, but the equilibrium price increases and profit decreases.
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