Please show the work...
Solution is attached
Firm's fixed costs can be calculated by putting Q=0
Average fixed costs, AFC=TFC/q=50/q
Total Variable Cost (TVC) is given by
Average variable cost (AVC) is given by
For equilibrium price, put Qd=Qs
Market equilibrium price =$5
Each firm is a price taker in perfectly competitive environment. It will select its output such that MR=MC=P to maximize its profits.
Each typical potato firm will produce 5 units and sell at a price of $5 per unit.
Total Revenue at optimal ...
Dead weight loss is determined.