INSTRUCTIONS:
1. Answer the following questions and explain your work.
Question 1. In competitive markets, there are many small firms with
each firm unable to influence the market price. Suppose company ABX
operates in the wheat market. The company produces and markets
wheats at a Price = $20 per container. The firm’s total costs are
given as: TC = 50 +2Q + 3Q2
a) Find the Firm’s marginal cost? Show your steps, including
graphs. Review additional resources? Hint: See the rules for
differentiation
b) What is the firm’s demand curve? Show it on a graph and label
the axes showing P and Q
c) What level of output should the firm produce? Hint: Set P = MC
and solve for Q. Use a graph to show your answers as well
d) What is the firm Fixed Cost? Why? Also, use a graph to support
your answer.
e) What price should the firm charge? Why?
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