Producers-consumers and competitive markets

Reference no: EM1370431

Assume that the competitive firm's marginal cost of producing output q is given by MC(q)=3+2q. Suppose that the market price of the firm's product is $9.

a. Find out level of output will the firm produce?

b. Find out the firm's producer surplus?

c. Assume that the average variable cost of the firm is given by AVC(q)=3+q. Suppose that the firm's fixed costs are known to be $3. Will the firm be earning a positive, negative, or zero profit in the short run?

Reference no: EM1370431

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