m 3 Summer 2018Requires Respondus LockDown Browse edhrs 25 9

m #3 (Summer 2018)-Requires Respondus LockDown Browse ed:hrs 25 9:46am iz Instructions Question 7 r TC-300-120 20iperfect compettion how mach wil each individual firm procduce in the long-run? Enter w a vaue 2

Solution

firm operates at where Average total cost is minimum.

Hence TC = 200 - 12Q + 2Q^2

ATC = 200/Q - 12 + 2Q

On differentiating and putting equal to Zero

2 - 200/Q^2 = 0

200 = 2Q^2

Q^2 = 200/2

Q^2 = 100

On Squaring:

Q = 10

Each firm will produce 10 units.