Suppose a perfectly competitive firm's total cost curve is described as C (q) = 1, 345.60 + 20 9. Assume that the short-run cost curve given is the one all firms use in the long-run because the corresponding short- run AC curve is tangent to the long-run AC curve at the minimum point of the LRAC. Part (a): Write out the individual firm's SR and LR supply curve. Part (b): Suppose the firm develops new technology that lowers the total cost of production by 50%. If the firm decides to keep the technology, calculate the firm's economic rents. If necessary, round output down to the nearest integer and prices to two decimal places.

Suppose a perfectly competitive firm's total cost curve is described as C (q) = 1, 345.60 + 20 9. Assume that the short-run cost curve given is the one all firms use in the long-run because the corresponding short- run AC curve is tangent to the long-run AC curve at the minimum point of the LRAC. Part (a): Write out the individual firm's SR and LR supply curve. Part (b): Suppose the firm develops new technology that lowers the total cost of production by 50%. If the firm decides to keep the technology, calculate the firm's economic rents. If necessary, round output down to the nearest integer and prices to two decimal places.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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