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    A company makes computer disks that consumers perceive as identical to those produced by numerous other manufacturers. The company now wants to estimate its cost function for producing boxes of one dozen disks. The estimated cost function is C=20 + 2Q^2 (2Q squared). If firms in the market sell the product ( a box of a dozen disks) at a price of $10...

    a. What is the firm's marginal cost?
    b. How much should the firm charge for the product?
    c. What is the optimal level of output to maximize profits?
    d. How much profit will be earned?
    e. In the long run, should this firm continue to operate or shut down? Why?

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    A company makes computer disks that consumers perceive as identical to those produced by numerous other manufacturers. The company now wants to estimate its cost function for producing boxes of one dozen disks. The estimated ...

    Solution Summary

    The optimal level of output to maximize profits is discovered.

    $2.49

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