Suppose you are the manager of a watchmaking firm operating in a competitive market. Your cost of production is given by.
C=100+2q2
Where q is the level of output and C is total cost.(The marginal cost of production, MC(q), is 4q; the fixed cost, FC, is $100)
If the price of a watch is $120, how many watches should you produce to maximize profits?
You should produce _____watches.
What will the profit level be?
Profit will be $________.
At what minimum price will the firm produce a positive output?
In the short run, the firm will produce if price is greater $_______per watch