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You Are Given the Following Cost Equations for a Typical

question 38

Essay

You are given the following cost equations for a typical, perfectly competitive firm with no fixed costs:
ATC = q2 ? 48 × q + 25
MC = 2 × q
a. If the market price is $100, determine the profit-maximizing quantity produced by this firm, its average total cost (ATC), and its profits.
b. If there are 50 identical firms in the market, what would the market output be?
c. What would you expect to happen to the short-run market supply curve in this market? Explain.


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