Computing short run supply functions for firm-market

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Reference no: EM1368029

Carolina Textiles, Inc., is a small manufacturer of cotton linen that it sells in a perfectly competitive market. Given $100,000 in fixed costs per day, the daily total cost function for this product is described by:

TC = $100,000 + $2Q + $0.0625Q^2

MC =dTC/dQ = $2 + $0.125Q

where Q is units of cotton linen produced per day. Assume that MC > AVC at every point along the firm's marginal cost curve, and that total costs include a normal profit.

A. Derive the firm's supply curve, expressing quantity as a function of price.

B. Derive the market supply curve if North Carolina Textiles is one of 1,000 competitors.

C. Calculate market supply per day at a market price of $47 per unit.

Reference no: EM1368029

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