Question: 8 consider the following demand price and marginal revenue and...
8. Consider the following Demand (Price and Marginal Revenue) and Cost (Total and Marginal) relationships expressed as functions of Q: Price = P(Q) = 310 – 2Q TC = TC(Q) = 3500 + 70Q + Q2 MR = MR(Q) = 310 – 4Q MC = MC(Q) = 70 + 2Q
a. What is the profit-maximizing level of output? What is the price at that level?
b. Should the firm continue operating in the short run? In the long run?
c. At the level of output you determined in (a), what is the lowest price at which this firm should continue producing in the short run?