View the step-by-step solution to:

Now switch perspective to the firm's cost side assuming the same technology: y = 2????1 .5????

Now switch perspective to the firm's cost side assuming the same technology: y = 2????1 .5????2 .5 .


a. Again assuming, in the short-run, x2 is fixed at 1 unit, derive the equations and graph of the firm's short-run cost curves: Total Cost (C(y)), ATC, AVC, and MC. Derivation:




Graph:








b.If the firm again faces an output price of 1, use the MR=MC rule to compute the firm's profit maximizing output level.




c. Compare the solution (y*) form the profit maximizing approach in question 3 to the solution using the MR = MC rule in question 4.




d. What is the firm's supply curve?





e. What is the firm's shut down price?




f. Suppose there are Z firms in this market. Write the equation for market supply.

Recently Asked Questions

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

-

Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question