The Netnam Company total cost function is:   TC = 2q + 2q2 + 75   Suppose that the firm is in perfect competitive market. Write the firm’s short run supply function? If the current market price is $30 per unit, find the firm’s optimum output? How much profit does the firm obtained? If the market price is at $10, what is the firm’s output decision? Explain your answer. Question 3:

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Queston 2:

The Netnam Company total cost function is:

 

TC = 2q + 2q2 + 75

 

Suppose that the firm is in perfect competitive market.

  1. Write the firm’s short run supply function?
  2. If the current market price is $30 per unit, find the firm’s optimum output? How much profit does the firm obtained?
  3. If the market price is at $10, what is the firm’s output decision? Explain your answer.
Question 3: 

In the short-run, the ABC Company has fixed cost of 4. The firm’s average variable cost function is AVC = q + 1. The current market price is $7.

  1. What is the firm’s output to maximize profit? Calculate this profit level?
  2. Find the market price at which firm is at break-even status?
  3. Calculate the market price at which firm will shut down the business?
  4. Find the firm’s short-run supply function? Draw the firm’s supply curve.
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