A firm in perfectly competitive market maximizes profit by producing at the point where price = MC.
Therefore, setting 4 + 4q = 20
Or, 4q = 16
Or, q = 4
This firm's profit maximizing output is 4 units. Therefore, the firm is maximizing profit.
In the long run, a perfectly competitive firm produces on the minimum point on ATC so that it earns zero economic profit in long run.
ATC = (TC/q) = (60/q) +4 + 2q
If ATC is minimized then d(ATC)/dq = 0
Or, -(60/q2) + 0 + 2 = 0
Or, (60/q2) = 2
Or, q2 = 30
Or, q = √30 = 5.48 = 6 units of output
A firm produces a product in a competitive industry and has a total cost function (TC)...
1. 1 :36 - 45 0 19273-26 9 . 12 A firm produces a product in a competitive industry and has a total cost function C+50 + 40 +29' and a marginal cost function MC = 4 +4q. At the given market price of $20, the firm is producing 5 units of TR4204 output. Is the firm maximizing its profit? What quantity of output should the firm produce in the long EMR=20 run? 2 4149=20 974 STRIAIS VD
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