Suppose that the manager of a firm operating in a competitive market has estimated the firm's average variable costs function to be AVC = 10 – 0.03q + 0.00005q² TC = 600 + 10q – 0.03q² + 0.00005q³ - The MC curve in this setting is MC = 10 – 0.06q + 0.00015q² Suppose the market price for output is $10 per unit. What is the profit maximizing level of output? (Start q at 0, but increase it by 50 each step. Get q at least past 600. Also, be sure to pass though every step of the maximization flow chart to answer all questions.) What is the profit per unit of output? What is the total profit of this firm?

Suppose that the manager of a firm operating in a competitive market has estimated the firm's average variable costs function to be AVC = 10 – 0.03q + 0.00005q² TC = 600 + 10q – 0.03q² + 0.00005q³ - The MC curve in this setting is MC = 10 – 0.06q + 0.00015q² Suppose the market price for output is $10 per unit. What is the profit maximizing level of output? (Start q at 0, but increase it by 50 each step. Get q at least past 600. Also, be sure to pass though every step of the maximization flow chart to answer all questions.) What is the profit per unit of output? What is the total profit of this firm?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter2: Mathematics For Microeconomics

Section: Chapter Questions

Problem 2.2P

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Suppose that the manager of a firm operating in a competitive market has estimated the firm's average variable cost function to be - 0.03Q + 0.00005Q² AVC = 10 – Total fixed cost is $600. a. What is the corresponding marginal cost function? b. At what output is AVC at its minimum? c. What is the minimum value for AVC?
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