What should be the production level if the producer

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Reference no: EM13244098

A software producer has fixed costs of $20,000 per month and her Total Variable Costs (TVC) as a function of output Q are given below:

Q        TVC     Price
2,000 $5,000   $20
4,000 7,000      15
6,000 18,000    10
8,000 33,000      5
10,000 50,000    1

If software can only be produced in the quantities above,

a) What should be the production level if the producer operates in a monopolistic competitive market where the price of software at each possible quantity is also listed above?

b) What should be the production level if fixed costs rose to $70,000 per month?

Reference no: EM13244098

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