Suppose a competitive rm produces spaghetti dinners. The market price of a spaghetti dinner is $20. The cost of making the dinners is given by C (Q ) = 10Q + (Q 2/160). The marginal cost is given by MC = 10 + (Q/80).
(a) How many spaghetti dinners should the rm make each day?
(b) What if the rm has avoidable xed costs of $1562.50?
(c) What is the rm's supply function if there is no avoidable xed cost?
(d) What is the supply function if the rm has avoidable xed costs of $1562.50?