Suppose the short run market price a competitive firm faces is Birr 9 and the total cost of the firm is: TC = 200 + Q + 0.02Q 2 . Answer the questions that follow. (A) Calculate the short run equilibrium output and profit of the firm. (B) Derive the MC, ATC, and AVC and calculate the values at the short run equilibrium output. (C) Calculate the producers’ surplus at the equilibrium output. (D) Find the output level that will make the profit of the firm zero.

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2 To answer these questions, we will use the information provided and some basic economic concepts. Let's go step by step:

A) To calculate the short-run equilibrium output and profit of the firm, we need to find the output level at which the firm maximizes its profit. In a competitive market, a firm maximizes its profit by producing at the quantity where marginal cost (MC) equals the market price.

Step 1: Find the marginal cost (MC):
MC is the change in total cost (TC) divided by the change in quantity (Q). In this case, the total cost function is given as TC = 200 + Q + 0.02Q^2.

To find MC, we take the derivative of TC with respect to Q:
MC = dTC/dQ = 1 + 0.04Q.

B) To derive the average total cost (ATC) and average variable cost (AVC), we need to divide the total cost by the quantity:

ATC = TC/Q = (200 + Q + 0.02Q^2)/Q = 200/Q + 1 + 0.02Q.
AVC = TVC/Q = (Q + 0.02Q^2)/Q = 1 + 0.02Q.

To calculate the values of MC, ATC, and AVC at the short-run equilibrium output, we substitute the equilibrium output level (Q*) into these formulas.

C) To calculate the producer's surplus at the equilibrium output, we need to find the area between the supply curve and the market price. In a competitive market, producer's surplus represents the profit earned by the firm.

In this case, the market price is given as Birr 9, and the equilibrium output is determined by setting MC equal to the market price. Solve the equation MC = 9 to find the equilibrium output level (Q*).

D) To find the output level that will make the profit of the firm zero, we need to find the quantity at which total cost equals total revenue. Total revenue (TR) is equal to the market price (P) multiplied by the quantity (Q).

TR = P * Q
Profit = TR - TC

Set the profit equal to zero and solve for the quantity (Q) to find the output level that will make the firm's profit zero.

By following these steps, you can answer the questions based on the given information and economic concepts.