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Soli Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other...

Soli Industries manufactures floppy disks that consumers perceive as identical to those produced by numerous other manufacturers. Recently, Soli hired an econometrician to estimate its cost function for producing boxes of one dozen floppy disks. The estimated cost function is: C(Q) = 6000 + 0.04 Q + 0.004 Q2      MC(Q) = 0.04 + 0.008 Q

What are the firm’s fixed costs? (1)

     Suppose other firms in the market sell the product at a price of $9

How much should this firm charge for the product? (1)

What is the optimal level of output to maximize profits? (1)

What are the profit or losses? (1)

In the short run, should this firm continue to operate or shut down? (1) Why? (1)

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