Asked by hiten
A market (or industry) demand curve is described by
Q = 50 – 0.5 P
The firm’s cost function is
TC = 10 + 2 Q
a. Find the profit-maximizing quantity and price.
b. If the industry is regulated in a way that requires it to set P = AC, how much will be sold and what will the price be?
c. If the industry is regulated in a way that requires it to set P = MC, how much will be sold and what will the price be?
Q = 50 – 0.5 P
The firm’s cost function is
TC = 10 + 2 Q
a. Find the profit-maximizing quantity and price.
b. If the industry is regulated in a way that requires it to set P = AC, how much will be sold and what will the price be?
c. If the industry is regulated in a way that requires it to set P = MC, how much will be sold and what will the price be?