Q1. A perfectly competitive firm has total cost function as follow:
TC ($) = 2q2 + 4q + 200
a. What are the firm's break-even output and price?
b. Assuming that the market price is $24, should the firm produce? Why?
c. Assuming that the market price is $84, what are the firm's output, producer surplus and profit? What is the firm's supply function?
Q2. if income rises from 1000 to 1800 and consumption rises from 1100 to 1700 the marginal propensity to save is ?
Q3. Suppose a monopolist faces the following demand curve:
P = 596 - 6Q. Marginal cost of production is constant and equal to $20, and there are no fixed costs.