A competitive firm has a short-run cost function ????(????) = 4????− 8????+ 16???? + 32a) What is the firm's marginal cost function? [3 marks]

b) What is the firm's average variable cost function? [3 marks]

c) What is the firm's average cost function? [3 marks]

d) What is the firm's average fixed cost function? [3 marks]

e) Sketch a diagram showing the shapes of the marginal cost function, the average total cost function and the average variable cost function. Be sure to label any axis or curve intersection points. Be sure to state the coordinates where curves intersect each other. [7 marks]

f) Show the firm's short-run supply curve on your diagram. [3 marks]

g) How much output would the firm supply at an output price of $16? Would the firm make a profit or suffer loss? Justify your answer. [4 marks]

h) Again assume that $16 is the output price today. Given your answer to part (g), will the price of output rise or fall in the long rung? Explain your answer. [3 marks]

i) How low must the price fall for firm to stop trading? Explain your answer. [3 marks]

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