Suppose that a competitive firm's marginal cost producing output q is given by MC (q) = 3+2q Assume that the market price for the firm's product is$9.
A. What level of output will the firm produce?
B. Suppose the firm's fixed cost is known to be $ 3. Will the firm be earning positive, negative or zero profit.
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To maximize profits, the firm should set marginal revenue equal to marginal cost. Given the fact that this firm is operating in a competitive market, the market price it faces is equal to marginal revenue. Thus, the firm should set the market price equal to marginal cost to maximize its profits: 9 = 3 + 2q, or q = 3.
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idk sorry dear.............................
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