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87 - 16 5 Points 4 17 10 Points Andrew’s Transitors...

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Unformatted text preview: 16 5 Points 4 17 10 Points Andrew’s Transitors Company is a firm that makes The demand for Sappersteens and associated total tacos in the Town of Carrhilly. The transitor making costs for producing Sappersteens are given by the industry is a perfectly competitive industry. Andrew following equations: P(Q) = 240 — 4Q and C(Q) 2 has cost function given by C(q) = 5000 + 4g + ng + 2Q + 4622. Assume that Suki (30.. the firm that pro— %q3. The going market price for transistors is $24. duces Sappersteens, has a monopoly on producing Sa erstens. ' . , “ii ‘3, (“l i. J3 u. “1"" s .539. is“ a) If the shutdown price is the price where Andrew pp Mia“ Si“ 59% bw‘g 313” 3 w“? MR“ a? fee is exactly indifferent between staying in the mar— 3.) Determine Suki’s marginal revenue for Sapper— ket and shutting down, where marginal cost and steens. Graph both the demand and marginal average cost are equated, determine the shut— revenue curves on the same graph. (Leave your— down price in this example. self room on the graph and make it large. You will be using this graph throughout this whole question.) ._-c<sz- 53s: rig riff: __ ”is s i‘ s at a... EM”... is) Given that Andrew acts optimally, What will An— drew do in the short run here, stay open for busi- ness or just accept his fixed costs and move on to better business ventures? A b) Derive the mardinal cost (MC) and average cost -" a: a f . O a: fill C ’ Ll iSE Ff” if W (AC) for the production of Sappersteens. Graph MC on the same graph you constructed in part r:- éé’vr-E‘E . .. anti g £3, - (a) ? 9;st w». :2? $ in; t-lg‘i i. «""W Raw-f {Mil ; "” izsfi k‘ 1 a we t5? .f ‘ K a a, _ sis g E: e if m ass Mal My \EC} 93“,} at“; at”? 35$; he. 3A9 sic) ”ST-5's m {fies r heir Assisi it fit 3%)“, ...
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