Question:
Consider the following cost functions of a perfectly competitive firm?
Marginal Cost= MC = 6q + 20
Average Total coat = ATC = 20 +3q + 10/q
Suppose the price is P=$28
A) What is the profit maximizing output for Q
B) Calculate the firms profit or loss, should firm shut down if loss?
C) Calc producer surplus, how much is the difference between the producer surplus and profit in this case?