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Derive the equations for average cost

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Reference no: EM132661405

Suppose that you estimate the following cost function for your company, which is a firm operating in a monopolistically competitive market:

TC = 180Q - 8Q2 + 0.5Q3

You also estimate the following demand curve for the output you are producing.

P = 360 - 8Q

-Derive the equations for average cost and marginal cost curves.

-Over what range of output does economies of scale exist? Diseconomies of scale?

-How many units of output will you produce and what price will you charge for each unit?

-Is the company making a profit or loss at the suggested output level? How much?

Reference no: EM132661405

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