Solved: Cost functions of a perfectly competitive firm, Macroeconomics

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Cost functions of a perfectly competitive firm

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?

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Macroeconomics: Cost functions of a perfectly competitive firm

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