Exercise 3: A perfect competition firm has a demand equaltion of P=8 ($) and total cost equation of TC= Q²+ 2Q+ 4 ($) 1. Identify TR and MR equation? 2. Identify MC, VC, AVC, AFC, ATC equation? 3. What is optimal output level (Q*) that gives the firm profit maximization? What is the maximum profit ? 4. What is break even price and break even quantity? 5. If market price decrease to P= 4$, should the firm continue the production? Why?

Exercise 3: A perfect competition firm has a demand equaltion of P=8 ($) and total cost equation of TC= Q²+ 2Q+ 4 ($) 1. Identify TR and MR equation? 2. Identify MC, VC, AVC, AFC, ATC equation? 3. What is optimal output level (Q*) that gives the firm profit maximization? What is the maximum profit ? 4. What is break even price and break even quantity? 5. If market price decrease to P= 4$, should the firm continue the production? Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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