Explain why the graph of the (total) cost function is always above the x -axis and can never move downward as you go from left to right. Is the same thing true of the graph of the average cost function?
Example 1
Joseph Nolan has studied the supply and demand for aluminum siding and has determined that the price per unit, * p, and the quantity demanded, q, are related by the linear equation
Example 2
Suppose the economist in Example 8 concludes that the supply q of siding is related to its price p by the equation
Example 3
The supply and demand curves of Examples 8 and 9 are shown in Figure 3.22 . Determine graphically whether there is a surplus or a shortage of supply at a price of $40 per unit.
Example 4
In the situation described in Examples 8 – 10, what is the equilibrium quantity? What is the equilibrium price?
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