Sunday
April 20, 2014

Homework Help: Economics

Posted by Jon on Wednesday, October 31, 2007 at 9:21pm.

Yeah, so I'm in urgent need of help with this homework.

1. Assume that in a perfectly competitive market, a firm's costs and revenue are:

Marginal cost = average variable cost at $20
Marginal cost = average total cost at $30
Marginal cost = average revenue at $25

A) How will this firm determine the profit-maximizing level of output?
B) What price will this firm charge? Explain how the firm determined this price.
C) Should this firm produce in the short run? Why or why not?
D) Will this firm eart a profit or incur a loss? Why?

Any help would be greatly appreciated, thanks!

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