Sppose a firm has the following total cost function tc

Question

Q1) Suppose a firm has the following total cost function: TC = 100 + 4q². What is the minimum price necessary for the firm to earn profit? Below what price will the firm shut down in the short run?

Q2) Lelu runs a firm that sells multi-passes to intergalactic cruises. Her short-run cost function is given by

C(q) = q² + 25q + 144

a. If the market price is $75/pass, how many units will Lelu produce?

b. At what price will Lelu earn zero profits?

c. If the price is below the level you found in b., will Lelu shut down? If so, explain. If not, below what price will she shut down?

Q3) Suppose a firm has the following total cost function TC = 100 + 2q². If price equals $20, what is the firm's profit maximizing output? What are its short-run profits?

4) Suppose that there are 80 firms in a market, each with the following cost function:

C(q) =100 + 4q²

a. Derive the short-run market supply curve.

b. Suppose the market demand is

Q_D = 1280 - 30p

Find the equilibrium market quantity and price.

c. How much output will each firm produce? How much profit is each firm making?