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Suppose a firm's total cost function is T C ( Q ) = 80 + 9...

Suppose a firm's total cost function is T C ( Q ) = 80 + 9 Q − 0.75 Q 2 + 0.03 Q 3.

To the nearest $0.01, what is the firm's shutdown price?

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Answer #1

Shutdown price is a minimum average variable cost and output level at the minimum is found by equating first differentiation equal to zero and FC=the cost is same at all level and it is equal to total cost at Q=0, FC=80, and VC=TC-FC

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