A perfectly competitive firm has total revenue and total cost curves given by:
TR = 100Q
TC = 5,000 + 2Q + 0.2 Q2
a. Find the profit-maximizing output for this firm.
b. What profit does the firm make?
a. MR = 100
MC = 2 + .4Q
100 = 2 + .4Q
Q* = 245
b. Profit = 100 ? 245 - 5,000 - 2(245 ) - 0.2 (245 )2 = $7,005
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a. The world price of petroleum would decline. b. The domestic price of petroleum would decline. c. The domestic price of petroleum would increase. d. The world price of petroleum will remain unaffected.
A head tax is
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