suppose the shortrun market price a competitive firm faces is birr 9 and the total cost of the firm is tc-200+q+0.02qanswer the quetions follow
a)calculate the short run equilibrium out put and profit of the firm
b)drive the mc atc and avc
Solution:
a.). The short run equilibrium output: MR = MC
MR = 9
MC = = q
9 = q
Quantity = 9
b.). MC = 1
ATC =
AVC = VC/Q =
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