Q. 4 The following total cost (TC) relation holds in both short run and long run for a monopolistically competitive firm TC=100+3Q+0.03Q^2 Where Q is the quantity of output TC function includes a risk adjusted normal rate of return on the firm’s investment In the short run, total revenue (TR) relation for this monopolistically competitive firm is given by: TR=11Q-0.01Q^2 Due to a high degree of product differentiation maintained by the firm, the firm demand curve in the long run is a parallel shift of its short-run demand curve. To maximise total profit in the short run, the firm should produce ___________ units of output ; To maximise total profit in the long run, the firm should produce _________ units of output. a.50;100 b. 100;50 c.100;58 d. 50;58
Q. 4 The following total cost (TC) relation holds in both short run and long run for a monopolistically competitive firm TC=100+3Q+0.03Q^2 Where Q is the quantity of output TC function includes a risk adjusted normal rate of return on the firm’s investment In the short run, total revenue (TR) relation for this monopolistically competitive firm is given by: TR=11Q-0.01Q^2 Due to a high degree of product differentiation maintained by the firm, the firm demand curve in the long run is a parallel shift of its short-run demand curve. To maximise total profit in the short run, the firm should produce ___________ units of output ; To maximise total profit in the long run, the firm should produce _________ units of output. a.50;100 b. 100;50 c.100;58 d. 50;58
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q. 4
The following total cost (TC) relation holds in both short run and long run for a monopolistically competitive firm
TC=100+3Q+0.03Q^2
Where Q is the quantity of output
TC function includes a risk adjusted normal rate of return on the firm’s investment
In the short run, total revenue (TR) relation for this monopolistically competitive firm is given by:
TR=11Q-0.01Q^2
Due to a high degree of product differentiation maintained by the firm, the firm demand curve in the long run is a parallel shift of its short-run demand curve.
To maximise total profit in the short run, the firm should produce ___________ units of output ; To maximise total profit in the long run, the firm should produce _________ units of output.
a.50;100
b. 100;50
c.100;58
d. 50;58
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