Problem
ABC is a firm operating in a perfectly competitive market, engaged in the production of consumer goods. The company?s total cost is TC = Q3 - 12Q2+70Q+100 and TR=100Q, the market demand and supply function given by Q = 760 -1.4P and Q= 620 + 0.6P respectively.
1. Is the firm producing gin the long run or short run? Explain
2. Find the price and quantity when the industry is at equilibrium
3. Compute firm's output level (Q*)that maximize profit
4. Calculate the maximum profit or minimum loss of the firm
5. Compute the shut-down price and the shutdown level of quantity
6. Consider ABC is operating in a monopoly environment , find the price , quantity and profit at equilibrium
7. Compare and contrast perfect competitive and the monopoly based on the result you got.