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How do I calculate an equilibrium number of something to produce when given the marginal cost and total cost functions? For example, I do not know how to solve the following problem to get the equilibrium:
Consider a market for cars in which GM is deciding how many Cruzes and Equinoxes to produce. To keep it simple, imagine a market in which the prices of Cruzes and Equinoxes is set by the competition, and they are fixed at PC = 30 and PE = 60 respectively. The cost of producing each of these cars is given by:
Where MC stands for marginal cost and TC for total cost.
a. What is the equilibrium number of Cruzes and Equinoxes?
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