Cardboard boxes are produced in a perfectly competitive market. Each identical firm has a short-run total cost curve of TC = 3Q3 – 18Q2 + 30Q + 50, where Q is measured in thousands of boxes per week. The firm’s associated marginal cost curve is MC = 9Q2 – 36Q + 30.
Which expression represents the firm’s average variable cost?
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What level of output would a firm in the cardboard box industry choose if it wanted to minimize its average variable cost of production?
To minimize average variable cost, the firm should produce units of output.
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Calculate the price below which a firm in the market will not produce any output in the short run (the shut-down price).
The shut-down price is $
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