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A competitive firm has a short-run total cost curve STC(q) = 0.1q2 +10q + 40.
a. Identify SVC and SFC.
b. Find and plot the SAC and SAVC curves.
c. For this function, the SMC curve is given by SMC(q) = 0.2q +10. Include this curve in your diagram for part b.
d. Write the equation for the firm’s short-run supply curve and indicate it in the above graph.
e. Find the firm’s break-even price pe (at which profits are zero) and its shut-down price ps.
The financial writer Andrew Tobias described an incident that occurred when he was a student at the Harvard Business School
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