Question

A (perfectly) competitive firm has total cost given by, TC(Q) = 5,000,000 + 5Q +Q2/10,000. Regarding...

A (perfectly) competitive firm has total cost given by, TC(Q) = 5,000,000 + 5Q +Q2/10,000. Regarding its fixed cost of $5 million, $X million can be avoided if the firm produces 0, but $(5,000,000-X) million is completely unavoidable: Even if the firm ceases production, it must be payed.if the market price is $40 (per q), at least how much should $X be for the firm to be better off not producing?

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Answer #1

X should atleast be $3,587,500.

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