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Consider a firm with short-run cost function C(q) = q2 + 10 + 25, where 25 represents fixed costs. In the short-run, how much

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Answer #1

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The profit is maximized at MC=P

MC=change in total cost =first differentiation of the cost fundtion =dC/dq=2q+10

equating with price

2q+10=12

2q=2

q=1

The firm should supply q=1 units.

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